You've probably seen dozens of house flipping shows on HGTV. They make it look like so much fun, so you've decided to get in on the game. How hard could it be?
Real estate flipping isn't a game, and it certainly isn't easy. It takes a lot of time and hard work to make a profit. But if you do it correctly, you could make a lot of money.
Keep reading to learn more about the exciting world of flipping houses.
How to Get Started as a House Flipper
You don't need a license to become a house flipper, but you should take time to plan before jumping in. The first thing you should do is set a budget for your investment. Remember, there are likely to be unexpected costs during this process, so always budget for more than you think you'll need.
Next comes finding a property. Look for foreclosures and short sales for cheaper properties that won't bust your budget. You'll also want to make sure that the necessary repairs aren't too extensive.
Once you've found a property, set your purchase price. Use the 70% rule as a guide. According to this rule, you shouldn't pay more than 70% of the after-repair value minus the cost of any repairs.
Once you've successfully purchased a property, you'll do either a partial or full property renovation. If you can't handle the repairs yourself, hire contractors to complete the project. While this is an added cost, it will ensure the work is done correctly and help you avoid costly mistakes.
After the renovation is complete, put the property on the market. You can try to sell it yourself, but it might be worthwhile to work with a real estate agent. Their expertise can widen your pool of potential buyers and help sell the property quickly.
Mistakes to Avoid
While house flipping has the potential to be lucrative, any missteps can eat into your profits. Here are some common mistakes you should avoid.
Not Budgeting Enough
You might have budgeted for the purchase price and renovation, but there are other costs you need to factor in too. As long as you own the property, you're responsible for paying any taxes and utility bills.
Underestimating the Time Commitment
It's not easy to flip houses on top of a full-time job. If you're doing the work yourself, you'll have to give up significant amounts of free time to finish the project. If you hire contractors, you might still need to be on site frequently to oversee the work.
Overestimating Your Skills
You might think you can handle a renovation on your own, but if your plumbing or carpentry skills aren't up to par, it's better to hire a professional. DIY renovations can end up costing you more in the long run if you have to bring someone in to fix your mistakes.
Real Estate Flipping in Morristown
Real estate flipping can be quite lucrative if you know how to do it right. Take time to carefully plan and avoid making costly mistakes to maximize your profit.
Are you an aspiring house flipper in Morristown? PMI Prime Property can guide you through the buying process and help make your flip a success. Get in touch today to talk investment strategies.
