When it comes to real estate investing, people have their own preferences with regards to how they wish to operate. For some people, buying real estate is all about making a quick profit but doing the property up and getting it sold as soon as possible. After selling real estate, investors can then use the profits for financing real estate opportunities elsewhere.
Of course, there are people that are interested in real estate investing with a view to making long-term profits, such as a rental income that they can make by renting out the property rather than selling it. However, many investors are more interested in turning a quick profit and then plowing more money into their real estate business so that they can quickly climb the ladder of investment and financial success. These are the investors that are eager to become property flippers.
Are You New to Flipping Real Estate?
Real estate investors that have been in the business for some time will already be familiar with the dos and don’ts of flipping properties. Many have learned through trial and error, which may have proven costly for them initially. Fortunately, today’s new real estate investors can learn from the more seasoned investors to help them to avoid real estate flipping mistakes that could prove damaging.
What You Need to Avoid
So, what are the main things that you need to be mindful of and try to avoid as a real estate flipper? Well, let’s take a look at some of the most important ones:
Avoid being unrealistic when it comes to finances
Being too slack when it comes to financial is something that can really take its toll in terms of your end profit, and as a property flipper, your end profit is what you it is all about.
Some novice investors get carried away when it comes to finances and start splashing out money left, right and center without a second thought about the consequences. However, you have to remember that the more unrealistic you are about your spending, the more it will affect your bottom line, and you could end up losing out significantly.
Avoid trying to cut corners.
Many investors that are completely new to real estate are impatient to get everything done and dusted as quickly as possible. There is nothing unnatural about this – after all, the whole purpose of flipping real estate is to make a profit quickly. However, the way you go about it is something you really need to be mindful of.
Do not make the mistake of trying to cut corners through shabby workmanship, low-quality materials, and half-finished jobs. Not only will this impact on your ability to make a sale but it could even prove dangerous or illegal depending on where you have cut corners.
Avoid advertising the property too soon.
Another temptation for novice real estate flippers is to try to advertise the property as quickly as possible. However, if you advertise too soon, the only thing interested parties will be presented with is a property that has wires hanging out, no flooring, and looks a complete state.
While you know what the property will look like once it is completed, your buyers may not be able to share your vision so you could lose sales as a result of premature advertising.
While you don’t have to wait until the work is 100 percent finished before you advertise, it is a good idea to wait until the majority of the work is done so that potential buyers can more easily see the aesthetic appeal and benefits of the property.
Avoid going off-schedule
Before you begin your rehab, you need to work out a schedule along with any contractors that you are using. This schedule is one that you should stick to as rigidly as possible.
Otherwise, you will end up facing delays, and this means financial losses. Of course, there may be unexpected situations that arise, but you need to make sure you stick to your original plans and schedule as closely as possible – and make sure that you reiterate this to all contractors and professionals that you are working with.
Avoid the temptation to start work without permits.
There are certain types of work that may require permits such as electrical and plumbing work. As a new investor, you may not realize the importance of these permits and, therefore, you may be tempted to do a little work that is unlicensed. Don’t do it! You could end up on the receiving end of a lawsuit in addition to numerous other problems and penalties.
Avoid trying to do everything online.
As a new investor looking to flip properties, it can be very tempting to go online and try to obtain all the information you need. Of course, there is plenty of great information and resources out there so this is definitely a great place to start.
However, avoid making it your only means of getting information and advice. There are many different professionals involved in real estate that you should take to face-to-face in order to boost your success such as a CPA or real estate agent.
Avoid putting your own stamp on the property
As a property flipper, you need to make sure the workmanship and materials used are of high standards. However, you do not have time to be thinking about fancy designs and trying to put your own stamp on the property in terms of design and fixtures. The more time you spend trying to be an interior designer, the longer the delay in your sale.
Once the property is ready to be seen, get it advertise and forget about spending money unnecessarily and frills and fancies that the buyer may not even like.
Enjoy Your Flipping Success!
By following these tips, you can look forward to greater success when it comes to flipping real estate and making a healthy profit. Over time, you will get to learn what you should and should not do, but to start with these points are definitely ones to bear in mind.