We all know of someone who has watched a “house flipping” show on HGTV and thought, “that seems easy enough to make a quick profit, let’s do it!” Heck, that may have even been you when you first got in to this industry. As every real estate investor soon finds out, though, it’s not as simple as it looks.
The art of flipping houses and yes, it should be considered an art, as it is a very intricate process can be a very financially rewarding process, but there are certain mistakes that even the most experienced investor can make. And a major mistake can be financially ruining to someone.
4 Common House Flipping Mistakes
- To Do It Yourself or Not. This comes down to you and your skill set; some independent contractors flip houses on the side for additional income, while other real estate investors who are not so good with a hammer and nail have to hire help to complete the renovation. The latter costs money, driving down your profit, while the former cuts away at your time. You have to make sure things are done right while still focusing on the bottom line.
- Not Securing Enough Money. How much leeway do you have in your budget? We should all know by now that very rarely does anything go to plan. Getting into the real estate investing industry is expensive and one can run out of funds very quickly when a project doesn't go as planned.
- Lack of Knowledge/Experience. Like we said at the beginning of this blog: it’s not as easy as it seems! A lot of things have to go right for you to turn a big profit when flipping a house. You have to know what you are looking for. Also, when additional expenses start to pile up on a project, do you know when it would probably just be best to cut your losses and get out? This is when a mentor comes in handy. Sometimes you need a trusted voice that can guide you and help you get experience.
- It Isn’t Quick. Some people think that flipping houses is a quick process, but in reality it is one that can take a lot of time and must be executed very well. Once you buy the property that you intend to fix up, it is then time to plan and perform the renovations. But it’s not time to put it on the market yet! You still have to make sure that your asset meets applicable building codes, and it could take a while to sell it. “House flipping” can be a lengthy situation at times.
Like most business ventures, getting into the industry of flipping houses requires you to be knowledgeable. Do your research and take your time! You may think you have it all figured out, but even the best need help sometimes. Call Catalyst Funding today at 832.648.3626 to get the advice you need to accelerate your future in real estate!