TV shows make house flipping look fun and easy. You buy a house to flip, make investments for the renovations, and sell it more than your original purchase price. Flip or Flop, Flip This House, and Flipping Vegas may show us the challenges one can expect when flipping. But in reality, there are far more risks and issues you will face once you get into flipping houses yourself. How do you know if you are meant for house flipping?
Many real estate investors would skip flipping houses due to the risks involved. You could end up buying a property, flip it nicely and still fail to sell it. There are times when you will fail to break even or even make more profit than you expected.
But there are certain types of people who make good flippers. How can you tell if flipping houses is for you? Here are some signs that say you should definitely try house flipping:
You Understand Both Time and Financial Commitments
Buying and flipping houses can be expensive. You are investing in a property that requires improvement. You need to dedicate enough time and money to make the necessary renovations and find ways to sell the house so you can make more money than the original purchase price.
You understand that there are times when you will need more funds to finance the improvements and pay your contractors. This means you need to have an emergency fund meant for your investment only. You also need to make sure you can get additional funding as necessary.
Then there’s the need to dedicate your precious time to the project. You have tons of time to spare, have the patience to wait for the project to finish, and are not in a hurry to sell. You know the value of time in real estate, and don’t mind waiting just so you can sell the property to the right buyer.
You Never Blindly Hire Help
In house flipping, you need to have the right contacts to help you complete your projects the best way possible at a given time frame. There may be lots of local contractors waiting for your call. But the last thing you need is to hire an unreliable contractor who will only waste your time and money.
You must research the best contractors in town, ask for recommendations, and check their online reviews. You already have a network of different contractors you can call for specialized projects. Also, you know for a fact that hiring the services will actually save you time and money in the process.
For instance, when one of your properties has a leaky faucet, a busted water heater, or requires a water main replacement, you don’t DIY nor do you settle on a handyman. You know who the best person to call and will only hire plumbing experts to do the job for you. In short, you already have a talented team you can hire for every project.
You Are Excited to Go House Flipping Despite Knowing the Risks
Those who wish to try house flipping need to realize that many things can go wrong. No matter how knowledgeable or prepared you are, there are risks and there can be hidden issues you did not know about. This can be major water damage that did now show up upon inspection or other problems that make it hard for you to sell the house even after the renovation.
Failure to do an after repair value can lead to a major financial loss. Hiring the wrong contractor can ruin your timeline and budget. Making a reckless purchase can also hurt your ability to make a profit.
Some real estate investors would quickly back out after knowing the risks associated with the investment. Anytime the risks outweigh the pros, they take a minute and take one step back. But despite you knowing and understanding the risks, you are still excited to give it a try.
You Don’t Believe in Instant Gratification
Some flippers retire early after they fail to be successful after a few projects. This is since they think they can retire only after flipping a house or two. If you are in a rush to build your wealth, then flipping houses is not for you.
Successful flippers know that you can learn a lot from your first project even if you don’t break even just yet. It is not enough that you are willing to hop on the wagon and experience flipping. You need to understand that retirement is still a long way after a few wins.
Flipping houses can be learned. But not everyone has the patience and resilience to make it work. Flipping takes more than just knowing how to improve properties and having more than enough funding. It is about your willingness to take the risks and not thinking that you can stop after an overnight success. It is about commitment, willingness to wait, and understanding all there is to learn about flipping properties.