Are you planning to flip a property? Best be careful – there’s a lot that can go wrong. And not all of it’s obvious.
Depending on how you do it, house flipping can either be one of the most lucrative things you’ll ever experience, or a complete flop. Unfortunately, for a lot of people, it seems like the latter’s more common. That’s because a lot of people seem to forget some of the most critical pieces of advice about house flipping (and really, any other entrepreneurial pursuit):
- Don’t go in without an exit strategy. You need a backup plan if your flip doesn’t work out.
- Don’t underestimate the time commitment. Flipping houses requires a lot of time and effort.
- Don’t invest everything you own into flipping. You don’t want your life to be on the line here.
- Don’t try to manage everything on your own – know when to bring in contractors and other experts.
- Don’t try to do it without a team.
- Don’t go in without doing your research.
Of course, that’s the obvious stuff. There are also a few lesser-known bungles which, while they might not completely ruin you, could still cause you no small end of grief. Making yourself aware of them is the first step to overcoming them.
Additional reading: If you’re interested in investing in real estate without the headache, check out this report on Fundrise’s 8-12% annual returns.
Demanding An Immediate Return
First thing’s first – understand that like anything worthwhile, house flipping takes time and effort. You can’t just slap a new coat of paint on an old house and turn it into an investment that’s worth a fortune. You need to cultivate a network of trusted contractors and professionals, and understand that factors such as the real estate market may impact your sale price.
The worst mistake you can make is trying to rush things.
Not Staging Your Property
Even if you do everything else right, you should never host a showing without first staging your property. A staged home not only sells faster than one devoid of furniture, but also has the potential to sell for more. And it only costs around $2500 to set up – a pittance compared to what you’ve already invested, and a drop in the bucket compared to the difference it can make in your sale price.
Sometimes, bringing in a professional designer or well experienced real estate agent, like those at Fast Florida House Sale, is the best way to ensure that you receive an exceptional price on your home.
Being Afraid To Move Forward
Successful house flippers have a lot more in common with entrepreneurs than you’d think. They know their own shortcomings, and understand the importance of working with a trusted team. And perhaps most importantly, they’re willing to overcome their fear and take calculated risks.
Fear is the ultimate killer of any entrepreneurial enterprise, house flipping included. Ask yourself what you’re afraid of, and confront it. Approach your fear logically, and understand that there’s always going to be some element of risk in what you’re doing.
There are plenty of mistakes you can make when flipping a house. Some of them are obvious – others less so. Learning to recognize and avoid both is key to your success.
Author bio: Armando Montelongo, Jr. is a real estate mogul, mentor, philanthropist, and speaker. As the CEO of Armando Montelongo Companies, he specializes in real estate investing and teaching his students how to strategically invest in residential and commercial real estate. Through these courses, he helps students positively transform their lives.