As with any other business, the more flips you undertake, the more you’re bound to learn from your own past mistakes.
Luckily, though, that doesn’t mean you need to start from the ground up; investors just like you have been flipping properties for decades, giving you the advantage of learning from their missteps.
What Not To Do When You Flip A House:
1. Forgo A Property Inspection
No matter what a home looks like— whether it’s withstood severe neglect or still appears to be habitable— there’s just no telling what you’re in for until a proper home inspection has been completed.
As the property’s new owner, it will be your responsibility to ensure the home is both safe for occupancy and compliant with the most current building codes. Fortunately, your home inspector can provide a brief overview of any glaring issues that will need to be addressed immediately.
Always make sure to account for the expense a professional home inspector’s fees when calculating your budget for an investment property.
2. Overestimate Your DIY Skills
Taking on some of the rehab projects is a great way to save money and maximize your total profits from a flip. With that said, however, it’s important to set realistic expectations for yourself and avoid biting off more than you can chew.
Understand that certain projects may take longer to complete when you go the DIY route, as opposed to hiring help.
3. Hire Unreliable Help
Although hiring a professional may sound like a foolproof way to complete your rehab on time, keep in mind that not all contractors are created equal.
Finding a professional who can get the job done and produce quality results at the same time requires effort. If you aren’t already acquainted with at least one contractor you trust, it may even be worthwhile to postpone house-hunting until after you’ve had the opportunity to find a qualified professional you’d be comfortable hiring.
4. Underestimate The Total Rehab Cost
Even the most experienced house flippers still face unexpected challenges during renovations— unfortunately, it’s inevitable.
5. Splurge On Too Many Expensive Materials
Always be sure to approach every flip with a business-oriented mindset. In other words, be mindful of how you invest your budget, and always consider the potential ROI each of your purchases may yield.
Custom kitchen cabinets, for example, can easily cost 4-5x more than pre-fab options, however, there’s no guarantee you’ll be able to recoup those costs when the home is sold.
Unless you happen to be flipping a luxury home in an upscale neighborhood, there’s no need to drive up your rehab costs with over-the-top materials.
Instead, here are a few simple ways to create a beautifully finished home that’s sure to attract eligible buyers:
- Stick to a neutral color palette
- Choose light earth-tone shades for wall colors and finishes
- Work on enhancing the property’s most attractive existing features
- Make sure the property has curb appeal
- Pay special attention to the home’s lighting—buyers hate to see dark, gloomy spaces during walkthroughs
- Stage the home thoughtfully
Remember, you can save money on your remodel without making the home look cheap!
6. List The Property As FSBO
Again, don’t be afraid to trust a professional—selling a house is easier said than done.
If you don’t have a background in real estate, figuring out an effective marketing strategy for the listing can prove quite difficult. To make matters worse, scammers are well aware of the fact that most FSBO listings are represented by inexperienced folks who likely don’t know which ploys to look out for.
Save yourself the frustration of having to figure it out as you go, and find a trustworthy Realtor instead who can work with you to attract suitable buyers.
Find Affordable Investment Properties Today With CastleRock
As the nation’s leading wholesaler of low-priced properties, CastleRock REO is the perfect resource for finding your first home to flip. Browse our nationwide inventory online today, and be sure to contact our friendly team if you have any questions about our listings!