Who doesn’t like bit of easy money? Or let’s say a lot of money earned without relatively working that hard. Everyone right. House flipping surely sounds easy enough. All one has to do is buy real estate one hand and sell it away the other hand. Simple as that.
But as easy it might sound, house flipping can put you in a lot of debt if not done carefully. As it is the haste to earn money makes people take wrong decisions quickly.
According to an online survey, investors flip around 100,000 homes in the first half of the year, making almost $30,000 per flip, on average. However, flipping isn’t as easy as it looks.
So to make your house flipping a success start by avoiding to fall prey to these mistakes:
- Lack of patience
Matters as risky as house flipping requires high levels of patience. In a fit to earn profits . One wrong step taken in a fit to earn profit is enough to enter you into an endless cycle of debt. Keep calm and recheck all clauses before finalizing any contract.
- Lack of time
Any new venture or business requires time and dedication. Such is house flipping. When you purchase a distressed property then you have to give time for its reparations. That can end up taking months. Afterwards, you have to wait for the right buyer. Basically, flipping is a time consuming way to earn money. The process is not as quick as the word flipping sounds!
- Lack of skills
As mentioned earlier, house flipping may seem quite easy. But it comes easy to only those who have the required skill set, negotiation being the most important of them. Every deal will put your skills to test. Apart from strong negotiation skills, one requires strong communication skills and command over the subordinates to get things done in time.
- Lack of money
Now, in house flipping you first have to invest your own money to repair or fix the house. And you get paid only when the house gets sold. In between comes a span of six to eight months where you go without seeing even the glimpse of a paycheck. So you need to have a backup option or other source of income.
Once you are done avoiding the above mistakes, take help from these tips to make your flips successful.
- Try ‘fix and flip’.
Fix and flip is among the best way to earn huge profits. Now what does it actually mean to fix and flip real estate? It means to buy a property which is in distressed condition and requires repairing. This property can be bought at a lower price because of its poor state. The cause of distress could be anything from fire to any disaster. Once it is fixed and repaired then it can be sold at a higher price and huge profits can be earned thereby making house flipping a success!
- Understand your market
The key to making flipping houses successful is to buy right and slash risk. You can buy right only when you understand your market and your repair plan. Thereafter risk can be cut by using cash only, and by completing the flip fast.