With many TV shows depicting house flippers having fun while making a profit, many investors have taken interest in the idea. In 2019 alone, 6.2% of all home sales in the U.S. were flipped homes! It sure looks easy on TV –buy a house, fix it up, put it back on the market, and make an easy sale –but is that all it takes? Before you join the bandwagon, let's look at some of the biggest mistakes flippers make so that you'll know how to avoid them.
One of the most common mistakes flippers make is not sticking with the budget. Before you invest in house flipping, you need to know how much it would cost to see the project through.
Real estate investing is expensive. Property acquisition alone costs tens of thousands to hundreds of thousands of dollars, even if you're buying a fixer-upper. Our mortgage calculator is a great place to start. Create a detailed budget before you commit to purchasing a fixer-upper to flip.
House flipping is a time-consuming venture that you can't treat as a hobby if you want to make money. It can take months before you find and buy the right property in hot markets. Once you've purchased the home, fixing it up takes time as well. You need to invest time and commit to it, from demolition to construction and selling the house. This is especially critical if you are doing all the work yourself.
A successful house flip involves picking the right property at the right location at the right price. You need to be familiar with the applicable tax laws and zoning laws before buying.
Take the time to learn all about house flipping. Newbies tend to rush and buy the first house available in the market, then hire the first contractor that makes a bid to do the renovations. An already experienced and successful house-flipper willing to share their knowledge is ideal.
Pricing a property is crucial to making a sale. Yes, you want to earn a profit, but overpricing your home will take longer for you to sell and adds to your overall costs, slowly chipping away at any potential profit. Study the community to check how much the competition sells their properties before purchasing or making any improvements.
Spending too much on your flip to make it better than all the other homes on the block can backfire! There's nothing wrong with making your flip comparable to other top-selling homes in the neighborhood but adding an expensive saltwater pool or marble showers is going overboard.
This doesn't mean that you won't use quality materials for improvements, but you want to be mindful about staying within your budget to protect your profit margins.
House flipping can be a lucrative business as long as you can avoid some investors' common flipping mistakes. Making a nice profit involves understanding the time and finances required in completing a house flip.
If you need funding for your house flip project, you can contact our trusted loan officers for more information.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 328527
CalDRE Company Lic: 01131611
Pacific First Financial Real Estate Loans, Inc. is not acting on behalf of or at the direction of HUD/FHA or the Federal Government. This material is not from HUD or FHA and has not been approved by HUD or any government agency.
4015 Pacific Coast HWY, Suite 202
Torrance, California 90505
Phone: (310) 214-9299
Pacific First Financial Real Estate Loans strives to ensure that its services are accessible to people with disabilities. Pacific First Financial Real Estate Loans has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Pacific First Financial Real Estate Loans makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows pac1st.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Pacific First Financial Real Estate Loans accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Pacific First Financial Real Estate Loans continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Pacific First Financial Real Estate Loans website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Pacific First Financial Real Estate Loans website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: email@example.com