5 House Flipping Do’s and Don’ts
Whenever starting any new endeavor, researching is the key to success. When it comes to investing personal money or the money of others, finding what others have done or not done to be successful is key when starting out or even as a seasoned investor. Below are some items that investors in all stages of flipping properties would want to consider.
1) Do check out the neighborhood before buying. Look at curb appeal of the other homes in the neighborhood. Are they trashy? Are all of the homes falling apart? What is the crime rate there? The buyer considers these questions when buying the home, so it would be prudent that the investor look for the answers to these questions as well.
2) Don’t blow the budget without just cause. A potential fire hazard due to faulty wiring has to be addressed where turning two bedrooms into a nice sized master bedroom with walking closets is not. The budget is what is used to determine whether or not the house would be a profitable venture. Blowing the budget on items that cannot be recouped will seriously cut into the potential profits if not eliminated them all together. The goal in property flipping is to get in and out quickly and spend as little money as possible in order to make as much money as possible.
3) Do set daily goals and hold those helping with the flip accountable to those goals. Prior to setting daily goals, know how much time it takes to do the particular fix. Build in some buffer time because depending on the type of fix, a delay may set the project back not just days, but possibly weeks. Contractors hired to do one part of the project are on a timeline and if the contingent project isn’t completed, they will move on to another. Waiting to get back on their calendar is where profits will be lost. Stick to the timeline and daily schedule in order to avoid potentially costly delays in time and money.
4) Don’t neglect the exterior. Curb appeal is what brings buyers into the property and is what everyone sees first. A homebuyer is in the market for the entire package. A home that looks run down on the outside leaves the impression of being neglected on the inside and many potential buyers will never walk inside if the outside looks forlorn.
5) Don’t spend money on high dollar ticket items. While it would be great to put in granite countertops and gourmet kitchens into every home it isn’t always practical and this is often money that will not be recovered, particularly in homes that are in marginal neighborhoods. Resurface bathroom fixtures rather than replacing them if possible and use new cabinet doors or hardware rather than adding new cabinets all together to cut down on expenses. In other words, salvage what can be salvaged, fix what needs to be fixed, and add a few cosmetic touches before moving on.
The market for real estate is dependent on many factors that change almost on a daily basis. Avoid risking too much time and money on a property that isn’t going to recover those added touches and expenses. Remember that research is the key for being successful.