House flipping has become a trend in the last decade or so but like any business ventures it has its ups and downs. Many interested parties are often a victim of their own enthusiasm and naivety. They often lack the knack required to be a success in the real estate market. In this article, we are going to look at the 5 biggest mistakes made in this venture and how to avoid them.
#1. Lack of skills.
Many people go into business ventures they know nothing about. They tend to get lured into it because they probably may have seen someone who’s making headway in the same venture. But what they don’t know is, that person may be a professional builder, contractor, carpenter or a professional in any skilled work required to be a success in the market. You are more likely to hire professionals to do your handy work for you which would eat into your potential profits. That’s when being experienced in the field comes in hand. You don’t need to hire someone to do work you can probably do better and you also earn more by paying less to workers.
#2. Lack of knowledge.
Most people lack the requisite knowledge in the house flipping market to be a success. You have to be street-wise, in the sense of being able to relate to all types of people and being quick-thinking and realistic. You need to find the right house to buy at the right place and at the right time. You need to know when to go all out and when to sit back and wait. You should also be aware of the existing tax and property laws governing the area you are interested in investing in.
Everybody wants instant success, quick money, an almighty formula to everything. Unfortunately, the world doesn’t work like that. If patience is not one your virtues then house flipping is not for you. A charlatan may rush into renovating a house at all costs, hire the first contractor he comes in contact with and sell to the first suitor that shows interest. He may be lucky and hit the jackpot, but more often than not they are left ruing their rash thinking and methods. A professional would know that the market is volatile and that sometimes it might take a little longer than expected to meet your targets but he would still bid his time, waiting patiently for the right deal.
After all, Rome was not built in a day.
#4. Little or no capital.
The real estate business is an expensive proposition so you need all the money you can get to thrive in it. Properties are at a premium and tax laws are not less forgiving either. Of -course there are low cut price deals every now and then but finding those deals can be like finding a needle in a haystack. To be on the safe side, don’t bite off more than you can chew. If you don’t have enough money don’t venture into it.
#5. Not enough time
House flipping is not a stroll in the park. It’s time-consuming and arduous. Many people underestimate the scale of the task and go into it with wishful thinking. Finding the right property takes time. Then you have to renovate which consumes time. Following renovation is the marketing and selling part which is also time-consuming. In short, time is of the essence and if you don’t have it then you are in the wrong business.