It’s funny how reality tv shows about flipping houses reflect very little about the actual process and outcome. You see a happily married couple secure a home for a steal, invest money into fixing it up, then sell the property for thousands of dollars in profit. Think about it for a moment. If it were actually that simple, wouldn’t everyone jump on the bandwagon?
Flipping properties can be a lucrative opportunity, but it isn’t without risks. There are several things you’ll never learn, no matter how many episodes you binge-watch. To truly understand the concept of house flipping, you have to do your research. Here are a few things you need to know to get you started.
Profits Aren’t Guaranteed
Yes. You read that right. Although you got into property flipping to turn a profit, there’s no guarantee that this will occur. You can find a good deal on a property, invest in repairs and renovations, and competitively price it on the market and still not get a dime. Some investors end up breaking even or suffering a loss.
There’s no shortage of things that could go wrong. Your contractor could find a bigger problem during renovations that will cost you more money. An economic downturn could result in a decline in buyer interest, which results in your property sitting on the market for months. Who knows? You could put a lot into the property but only get low-ball offers. Even though accepting the offer is dipping into your cut, it stings a lot less than owning a property that won’t sell. So, you reluctantly accept.
The Process Isn’t Cut And Dry
If you believe you’re going to find a property, fix it up, put it on the market, and sell it in just a few months, you’re setting yourself up for failure. The reality is that flipping a property is not a quick process. It takes time to locate properties, negotiate an offer, develop a plan, hire contractors, get improvements done, market, and, eventually, sell the property.
You also have to account for unexpected events that could delay your timeline even further. So, if you’re looking to generate thousands of dollars in six months or less, this may not be the business for you.
You Can’t Do It All Yourself
If you think you can take on the roles of a real estate agent, attorney, home inspector, and contractor by yourself, you’re in for a rude awakening. While some tasks are simple enough to tackle on your own, you need experts to help you accomplish your goals. Whether you ask for referrals, complete an online search, or use resources like Home Advisor Pro, you must outsource significant tasks to the professionals.
Contractors are educated, trained, and experienced to help you transform your properties into safe and efficient homes that buyers will be dying to have. They save you time, reduce your risk of injury, eliminate unnecessary mistakes, and boost your investment property’s value, comfort, and aesthetics. After reading a Home Advisor review or two, you’ll see just how beneficial contractors can be to investors and homeowners alike.
You Get What You Pay For
It would seem to your advantage to complete everything as cheaply as possible from the outside looking in. The less money you spend on products and services, the more you’ll reap in the end. On the contrary, you get what you pay for. If you hire someone that says they know construction instead of checking out HomeAdvisor reviews to find a qualified contractor, you could end up with a disaster on your hands.
If the contractor’s services are sub-par or they do more damage than repairs, you’ll have to dip into your projected profit to resolve the matter. Ultimately, the best thing you can do is invest in quality instead of thinking about generating the highest profit.
When you watch a few house flipping shows, it seems like a breeze to find undervalued properties and turn them into profitable goldmines. However, the reality is that it’s not that simple. Although this information doesn’t have to discourage you from flipping properties, it should give you more insight into what you’re getting into and how to prepare. Ultimately, being educated and having a plan are the foundational elements to becoming a success.