Four First Time Flipper Mistakes to Avoid

Are you planning or thinking about getting into the real estate investing business and have your heart set on flipping?   It is estimated that almost 40% of flippers end up on the short end of the bargain when they sell a home.  First time flippers can avoid a ton of headaches by avoiding these four mistakes a lot of investors make.

1)Set realistic timeframes-  When you are projecting your holding costs, project out at least 6 months.  Especially for the first one.   Yes, you can renovate and sell a home in 12 weeks, but think of that as the rare case and plan on 6.

2)Unrealistic budgets- If you are calculating out the cost of the labor and materials for your project add 20%.  This will allow plenty of room for unexpected surprises along the way.  I have a pretty awesome tool that does all of this for my investors and it builds in 20% into everything.

3) Unrealistic financial expectations- Few and far between are the days where you will make a $70,000 return on your $70,000 investment.  Kill it a little at a time.  $10K return on a 6 month investment isn't that bad.  Know the market and what you can expect your renovation to sell for and price it to sell right away.

4) Going overboard on Design-  Stop attempting to build the house with your personal preferences in mind.  Yes it would be nice to have inlayed tile throughout the entire shower, but it is really worth the extra money for what you will get in return? Probably not.

Even in today's market there are profits to be made renovating and reselling houses.  I think it is actually a good service to the community as many first time homebuyer's don't have the resources or vision to complete these projects on their own.  But it is a business and proper planning is necessary to make it work.  As I mentioned earlier in the article, I have a tool that takes and property and will help to figure out the costs of the renovation, and what you need to offer and sell it for to make your expected return on investment.  If you are interested in learning more or seeing the tool in action click my name below.