The 4 Biggest Hurdles New Home
The 4 Biggest Hurdles New Home Flippers ALWAYS Overlook
We’ve all seen the shows on television where people buy a run-down house, renovate it and then resell it for an enormous profit. And boy, do these TV shows make it look easy!
But as with most things in life, house-flipping is never as easy as it looks.
Before you think about quitting your job to embark upon an exciting (and unpredictable) career of flipping houses, it’s extremely important to understand each of the risks involved in the process. By learning from other people’s mistakes, you’ll have a much better chance at earning a profit when it comes time to flip your first house.
1. Flipping is a Serious Investment: People underestimate the risks involved in flipping houses, especially when obtaining financing to purchase the home. When you’re getting a loan, do your due diligence because time is of the essence. Make sure you check market values for the area that the home is located in. If the house is sitting on the market, it won’t be long before you’re paying interest and chipping away at your potential profit.
2. Not Knowing the Area: It’s important to know the local market that you’re going to be working in. You may think you’re getting a great deal but if it’s not in a high demand area that has a very limited supply, the house isn’t going to sell right away. If you know your market and want to start flipping houses, search houses for sale in your area to see some of the best deals.
3. Underestimating the Competition With all the hype about people getting rich off buying and re-selling homes for profit, everyone is trying to get in on the action. That means that the best deals are short-lived. Understand that you’ll be competing with many successful investors who have more resources and experience with flipping houses.
4. Cash is King, Borrowing Isn’t: Veteran house flippers buy low to get the best return on their investment. To get a deal on a house for way under market value, you’ll need cash. Cash offers will always be accepted over offers from buyers who need financing. Also, paying with cash means you won’t have to worry about a mortgage payment every month. You’ll just have to pay for the renovations, in addition to utilities and property taxes.
Think you’ve got what it takes to flip?
As you can see, flipping houses may not be quite as easy as TLC or HGTV are making it out to be. There’s a good deal of hard work and research that ends up getting edited out of their half-hour programs.
But if you’re still interested in taking a shot at it—and if you think you can avoid these four major hurdles—then perhaps you should give it a shot.
Flipping houses can be very rewarding but if you’re just getting your foot in the door, it’s important to start off small. Also, remember to avoid these common mistakes and you’ll be on your way to earning a nice profit!
About The Author:Based in Miami, FL, Houses.com provides the world’s largest online marketplace for homes and real estate. Showcasing over 4 million listings for sale, rent & vacation in over 70 countries, Houses.com is dedicated to helping buyers and sellers turn their House into a new Home.