First-Time Flipper? 4 Mistakes to Avoid
There’s a first time for everything—including house-flipping. Here are some major pitfalls to avoid.
Buying the Best House in a Poorly Maintained Neighborhood
Don’t try to flip a property in a neighborhood where all of the other homes are in bad condition. When you go to sell your flip, if the street is bad—or the area has no foreseeable growth potential—buyers will pass it up. Don’t become a case study by being the first investor on a bad block.
Ignoring Red Flags
The listing price of the home you found makes it a tempting purchase. Sure, there’s water damage…and the living room floor has a bit of a slope. And, yeah, there’s some termite damage, too. But the price is right.
These are all red flags. The reality is that this house might be too much for you to tackle. It’s a good idea to pass on houses like this until you get some flips, hopefully ones not so distressed, under your belt. And always consult a pro before you buy a home that contains mold or asbestos, first-time flipper or not.
Being Unrealistic About Your DIY Skills
There’s nothing wrong with rolling up your sleeves and putting some elbow grease into your flip with DIY projects. After all, work that you can complete on your own can save you money and increase your profit margin. Keep in mind, though, that you should be able to complete remodeling projects within a reasonable timeframe, and the work should look like a professional job—otherwise you’re defeating the purpose. So be realistic about which projects you can handle, and which ones you should leave to the pros.
Overimproving the House
You’re flipping to make a profit. So keep an eye on your bottom line and don’t put more money into your house than you can get out. While upgrades and high-end finishes can impress buyers and increase the value of your home, its location, square footage, and nearby comps are also heavy factors in determining its worth.
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