With the recent Flood of 2016 in August many people have been considering taking on a home flip. A home flip is defined by www.investopedia.com/terms/f/flipping.asp as a type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit. Profit is generated either through the price appreciation that occurs as a result of a hot housing market and/or from renovations and capital improvements. In short, most people believe what they see on T.V.,i.e., buy a crummy house, for super cheap, in a decent area and within a few weeks sell it for a HUGE profits making them tens of thousands of dollars within a 30 minute show. As you can image television reality isn’t reality. I’ve listed some pitfalls of doing your own flip so you can be better prepared before taking it on for yourself.
Cost of repairs.
Many people underestimate how much things cost. My best advice is to make a list of all the visible items, and plan ahead for the unexpected. Make a list of each item, get online and shop prices and have a side budget for things that come up as you are doing your flip. Try to estimate cost of repairs for items you are not 100% sure will need to be replaced so you can remain within budget.
Make a proper plan.
You can’t just go for the deal of the century without having a proper plan of action. You need to plan for ups and downs in the market. You need to plan for the time of year the home will be complete; to list it and lastly you need to realistically evaluate how much you can really handle.
Pricing your flip.
Every investor wants to get the most bang for their buck, but if you list your Prairieville home too high you may have priced yourself out of the market. If you are not seeing offers in a busy market within the first two weeks, the market has rejected your price and you have lost valuable time getting your flip home sold quickly.
“I’m Going To Be a MILLIONAIRE!”
Slow down there! Just like most anything, this will not make you Donald Trump over night. For newer investors the dreams of making it big and doing it easily can be too much,
and they get in way over their heads. This is not a get rich quick kind of thing. Take your time in a well coordinated pace, dedicate yourself to lots of hard work and you’ll do well.
But I can do it all by myself.
This is the biggest mistake most new investors make. They know how to lay tile, and had seen several YouTube videos on how to do some plumbing and now they feel like this will save them tons of money. This actually could be a very costly mistake which may delay your completion. It is best to call in experts to do these things and get as many quotes as you can before settling on a particular tradesman.
A final thought…you CAN make money flipping houses in Prairieville. Many investors do and profit handsomely from it. Those that do, have made a budget, scouted the neighborhood, determined a level of profit, made a plan and had great contractors who will work with them on timing and prices. All of these things will help you.
If you’d like help finding homes to flip and personalized advice on our market in Ascension Parish please do not hesitate to call so we can talk about your investing goals. Why?
“Because YOU Matter”
Your Real Estate Whisperer