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Sob Stories About Flipping A House
By Vic Hurlstorm | November 17, 2008
What you don’t see on many of the television shows about flipping houses are the many sad tales of promising flips gone wrong. These epic tales of woe are often the precursors to financial hardships for quite some time as those who fail at their property flips work on recovering from their heavy losses and moving on with their lives. Some are hit harder than others but the snowball effect of a bad flip are often not even hinted out on the prime time televisions shows that are so proud of the many success stories that arise because of serious and studious efforts in the house flipping arena.
If you are planning to flip a house for a real estate investment you really need to take a step back and decide that you are absolutely not going to be one of the house flip sob stories that are rumored about in Internet chat rooms. In fact, you want to be listed among the success stories. Unfortunately that takes a great deal of proper planning that is almost never shown on these television shows. In fact, to put forth your best effort you need to devote as much time to studying and planning properties, prices, and home values in your area before you even begin to search for your first property to flip as you need to invest in the entire process of actually working on your first flip. In other words, several months worth of planning and research need to go into your first house pick in order to lower the risk of not succeeding and to raise the odds of success.
The second thing you need to do when planning your first flip and avoiding a sad tale and a sob story is to be realistic and avoid great expectations. With your first flip you are darned lucky to turn a profit at all. If you are expect to make more money on your first property flip than you made all last year as a full time job, then you might need to make other plans. The first flip rarely goes as expected.
Third, you will need to put back at least twice as much money (or even three times as much) as you think you will need for the improvements on the property in order to cover the actual costs that you will incure. There will inevitably be tools that you need, permits to pull, supplies to get, and more labor that wasn't counted on in the original budget figures as well as the tendency to underestimate the cost of the supplies and materials that will be needed in order to get the project done. If you can't afford to spend that much and then walk away without a loss then the property you are considering probably is not the best property for your first flip.
Finally you need to plan everything. Every day will need to be planned before you show up and try to work on the house and you will need to have all the materials and supplies you will need on hand such as coffee, lunch, drinks, tools and supplies. Trips to the hardware store, lunch breaks, and coffee runs quickly kill a day and any productivity that may have been made during that day. Avoid these expensive delays by prior planning and you will soon discover that you have a real estate success story worth writing about.
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Topics: investment properties |