Flipping houses is a hot topic right now. There is no shortage of people looking to get in on the action and make some fast money flipping real estate. Almost everybody knows someone who knows someone who is in the business of flipping, and it seems like the way to go.
If you are interested in getting into the business, check out some of these Providence homes for sale to get you started. While you can make some great money and certainly make a living flipping, there are a few things you should try to avoid when taking on your first flip.
Not Enough Capital
Not having enough money is the single most significant reason that first-time flippers fail. While there are plenty of advertisements that offer easy loans, low down payment, and more, actually closing on a house is a different story. You want to make sure that you have enough cash reserve to cover repairs and cosmetic renovations.
That said, it is critical to budget for every penny as every dollar spent is potentially coming out of your bottom line. A problem that many first-time investors encounter is there is almost always more issues than you have planned for. So, if you went all in and were planning on plumbing repairs and then discovered the home needs electrical too, you might be sunk.
Time
Flipping your first home is most likely a side business and not your sole source of income. This can make it very difficult to devote the time the house needs in the beginning stages when you are working a 40-hour workweek already. When you are flipping on a budget, anything you can do yourself will help save your money.
You will need to get your hands dirty with the demolition and hauling, which can be challenging to do on weekends and evenings only. But it doesn’t stop there when you hire contractors; you will need to be available to meet with them, which often happens during regular business hours.
And then after the work is completed, you will need to schedule inspections and meet with realtors and potential buyers. You can see how this will quickly become a time suck.
Skill Set
The best home flippers either have a lot of disposable income or have a specialized set of skills that will help them save money during the renovation process. That doesn’t mean that you have to be a licensed plumber or electrician, but you should know your way around necessary home repairs.
The better you are with your hands and building, the more money you will save. Many first-time flippers make the mistake of thinking the home will be move-in ready right away. The truth is that most flippable houses require some serious repairs that you might not even be able to see.
And the more repairs you can handle without a contractor, the more profit you can bank, and you will save yourself a lot of trouble on the transaction.
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Founder Dinis Guarda
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