Flipping a House? Here's 5 Things You Should Know Before You Start
Many would agree that flipping houses has been glamorized and maybe even a little skewed. With no shortage of house flipping shows on tv, to those that aren’t familiar with how it works, purchasing, remodeling, fixing, and selling a house appears to have a few bumps in the road. But overall, the process looks like a fun, fulfilling project— and it can be. However, there’s so much more to fixing up houses than what’s on cable. The magic of TV allows us to see the finished project fast, with editing that makes the process seem, well— seamless. While this could always be your experience going into your first home flip, we’re here to tell you there may be a few additional things to consider beyond what you see on “House Flip.”
It’s Not Always Successful
We know— those shows make it seem like you can fix up a house, on time, on budget, and make a killing on the sale afterwards. Whie this could absolutely be the case, be aware that there are many instances where this simply isn’t reality. Home flips aren’t always what would be considered “successful” for a variety of reasons. These can include a budget that’s been blown out of the water, projects that took way too much time, a lack of buyer interest, a home that didn’t appreciate the way a buyer anticipated, and so many more scenarios. If home flipping is your passion, we’re not here to discourage you. Just go into it with eyes wide open, aware that there are definitely fails.It’s Time Consuming
Sure, when you have an entire team of specialists tackling remodels and aesthetic fixes, a house can become market-ready, fast. The question is— do you have that kind of team? For many people that have decided to tackle a house flip, their resources are limited. It could be just them, them and a partner, or even a few people but, at the end of the day, fixes are often made by the person who purchased the home to resell. That in itself can take a lot of time, often, more than what was previously anticipated. Know that when you’re going into flipping a house, especially if you’re new to it, things can come up, surprises happen, and timelines can absolutely get extended.
It Can Get Really Costly, Really Fast
For many that want to fix up and resell a house, the plan is to DIY quite a few items. That could mean anything from painting the walls to tackling an entire kitchen tear-down and installation on their own. Often, the amount of money that it takes to actually make these things a reality can be grossly underestimated. In huge part, this can be due to a lack of experience. After all, there are always places where maybe it’s best to have a professional come in, where a home flipper just finds it too difficult to do it themselves, or where material costs are far higher than what was originally thought. You may even find repairs that need to be made on things you thought were in perfect working order. Just assume that there may be some things that you haven’t planned for that can increase your initial budget.
Make Sure Your Partner is the Right One
As with anything, who you’re working with can make all the difference. So, if you do decide you want to work with a partner while flipping a house, make sure that they’re someone you work well with. Specifically, that means ensuring you’re on the same page on how much each party is working, what that work entails, how you’re going to split the profit, that you have a similar work ethic, etc. Making sure all of these things are discussed initially can save you a world of issues later on down the road.
Be Clear About Your House’s Worth
When flipping a house, you’ll want to be as close to exact as possible when it comes to figuring out it’s actual worth. This means knowing how much value that new flooring or redesigned kitchen can actually add to your home’s listing price. The best person to work with for something like this is a real estate agent that you can trust. Not only are they looking at countless houses day after day, they often have vast knowledge of the different areas and neighborhoods that you’re in, and can help you to not only price accurately, but also to size up the competition.
Flipping a house is no small undertaking. With pushed timelines, unanticipated expenses, and a variable market, what may seem like a small project can actually turn into a costly, time consuming endeavor. If you’re interested in flipping houses, be sure to consult with those who have done it, a real estate agent that you trust, and research as much as possible. That way, when it comes time to make the leap and flip a home for yourself, you’ll find that you’re set up for success and have a trusted network of resources around you.
