3 Things That Can Make House Flipping A Total Failure
Jan 12, 2022
Many real estate investors have found successful careers in house flipping especially over these past years. But one thing is for sure; their success didn’t happen overnight. They definitely went through a series of failures before they were able to reach that certain level of their career. So if you’re new to flipping houses or in the real estate industry, in general, please check these three things that you must avoid to make sure you have a profitable successful flipping endeavor in this industry.
Not Enough Profit
Investing in the real estate industry is very costly. The top on the list of your expenses is the property acquisition cost. It’s undeniably not easy to look for ways to fund this type of investment. That’s why you also need to find the deal that will work best for you. Because of that, you also have to make sure that you will get the profit you want.
However, this is one of the things that most people commit a mistake when flipping a house. Others weren’t able to calculate it correctly and even fell short with their gain out of the money they invested. As a flipper, you have to remember to factor the cost in property renovations and repairs, and other expenses.
Hence, to get the best return of investment or ROI, the sale price of your house should always be more than the amount of the combined cost of property acquisition, renovation and repairs, and holding cost of the property. Make sure to know your numbers for you to see if your investment is losing or earning a profit.
Not Enough Time
You may all know that flipping a house will consume a considerable amount of time. With the property's current physical condition, you will know what renovations and repairs are needed to make it more saleable before putting it back on the market. In fact, others may take a few months before they can finally find and buy the right property.
So once you’ve successfully purchased a house, you’ll then have to invest your time to fix it before selling it for a profit. But if you have a day job, you may have lost evenings and weekends that you can spend with your family and loved ones instead. If you also hire someone to do the work for you, you will need to spend extra time supervising your people to make sure that everything falls into place according to your plan. So one thing that is true about house flipping is that it can be quite a time investment. It has a long process, from doing research to looking for a perfect property you’ll get interested in buying up until the process of renovations and repairs and finding the right buyer. But when you set a proper expectation and allow yourself to deal with the most important things in this industry, you would know how much time you need in house flipping to earn the profit you want.
Not Enough Skills and Knowledge
Before you can have a successful career in house flipping, you need to have enough skills and knowledge around this particular business in the real estate industry. That’s why many professional builders, plumbers, carpenters, and many other related skilled professionals often do flip houses as their additional source of income. It’s because they know and have experience finding the right property and fixing it.
So if you’re one of them, that will be your great advantage. Otherwise, it’ll be your great challenge. However, there’s nothing to worry about because everything can be researched and learned over time. You may not become a professional carpenter to know how it can benefit from flipping a house, but, at least, you have the general knowledge of how the job works around doing this business.
One of the best things you can do is get in touch with those skilled and professional individuals who can significantly help you flip a house successfully and profitably. You can ask for pieces of advice from them and get as many tips as you want to make sure you’re doing the right thing in every single step you take from property acquisition until someone finally buys the property from you for a great profit.
Takeaway
Venturing into the real estate industry can be a great challenge to everyone, especially in flipping houses. Not just to new investors, but even the long-time flippers will also find it challenging with a profit in mind. So one thing you can do to make your career successful while flipping houses is to avoid the mistakes discussed above. Learn from them and make sure to always make informed decisions moving forward, and do your research to help yourself along the way.
If you are ready to get a mentor you can join my wholesaling program at https://www.phillipwarrick.com/mentorship.
If you are ready to flip and need a hard money loan or a long-term rental loan, let’s book a time to talk at rental loans: https://www.phillipwarrick.com/rental-loans.
You can also join my STR group coaching program here:
https://phillip-warrick.mykajabi.com/short-term-rental-investment
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