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How to Flip Properties with Ease

Young Couple Stressed Over House Flipping in LeanderHouse flipping in Leander seems like a simple concept: acquire a bargain property, conduct a little remodeling, and then sell it for a much higher price. There is no question that house flipping has provided substantial returns to many investors across the country. But flipping houses also involves a high degree of risk; a flipping project can easily develop into a nightmare if you aren’t careful. If you decide to try your hand at flipping houses, avoid these usual blunders, or you might find yourself in a real flipping nightmare!

Over-Improving the Property

One of the most typical mistakes that can instantly turn a house flip into a nightmare is not recognizing how much to improve the property. In particular, new house flippers frequently go too big in renovations, spending a lot more than necessary. Overspending can lead to budget troubles and failing to benefit from profits when you sell. Unless the property you bought is in a very high-end area, you don’t have to go too upscale. The best improvements will bring the property up to the level of the other homes in the neighborhood – but not too much beyond that.

Dealing with Property Damage

Another means that a house flip can become a nightmare is if you encounter vandalism, theft, or property damage. If a property has been sitting vacant for a long time, it may be more exposed to this problem. House flipper Carol Sankar of Charlotte, NC, describes one project in which the home was burglarized multiple times during the remodel. One day they were getting close to the end of the project when she arrived home to discover that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator vanished as well. Because the property was in an area with few security measures and a low police presence, there was little Sankar could do to get her stolen materials and appliances back.

Costly Mistakes

A third situation that can make a house flip haunt you is when making expensive financial mistakes. For example, house flipper Daniil Kleyman in Richmond, VA, purchased a project house for what he thought was a great deal. An experienced investor, he did a preliminary market assessment on the property and expected to be able to remodel and sell it for five times his cost. Unfortunately, Kleyman made a series of errors that resulted in losing money on the flip.

Not only did the first contractor he appointed walk off the job with his money and without finishing the project he was hired to do, but Kleyman had also selected the wrong comparable properties when estimating his post-remodel sales price. He had to list the property for significantly less than he had hoped. And then the property was burglarized, stripped to the walls, plumbing broken, and flooding in the basement. After fixing the damage and replacing the stolen appliances and fixtures, Kleyman was eventually able to sell the house at a loss to a buyer who wasn’t particularly enthusiastic.

Avoiding Flipping Nightmares

Stories like these illustrate some of the hardships that come with flipping houses for resale. These investors would have profited greatly from accurate market data, proven construction professionals, and the expertise of property management professionals from the beginning. In Kleyman’s situation, in particular, by first seeking the opinion of an industry expert like Real Property Management Advisors, he would have obtained a detailed market assessment before buying the property. He would have known the property’s market value from the start, perhaps changing some of his decisions later.

A professional Leander property manager would have also delivered Kleyman the names of trusted remodeling and repair vendors in his area and would have checked in with those vendors regularly, greatly lowering the likelihood that the contractor he hired would take his money and run. Last but not least, the team would have accurately priced and marketed his new property for him, locating quality tenants willing to pay a competitive monthly rental rate for as long as Kleyman wanted to retain the home. The value of this information and aid is difficult to overstate – it could mean the difference between a successful house flip and a flipping nightmare.

With local property management on your investment team, you’ll need the help of experts dedicated to making every one of your properties one of the best long-term investments you can make. For more information, contact us online today.


Originally published on July 12, 2019.

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