September 4, 2018
Flipping a house seems like a great way to make some money, especially if you have the skills required for a renovation and an eye for design. Those HGTV shows make it seem fun and profitable, so why can’t you give it a try? However, there are some mistakes that first-time flippers make that can cost them dearly in the long run.
Not Having the Home Inspected
The biggest mistake a flipper can make is not having the property inspected prior to purchasing. An auction or a short sale may make you rush the process in favor of closing the deal. Another reason that people skip the home inspection due to a tight budget. Some people think that they can simply walk through and see everything they need to see. This is never a wise decision.
When purchasing a property to flip it is essential to have it meticulously inspected for any issues before settling, otherwise your project could end up costing you more than it will make you. It’s better to know what kinds of problems the house has before you start working on it.
Not Estimating Renovation Costs Correctly
Another big mistake new flippers often make is underestimating their renovation costs. It is essential for a successful flip that you spend significantly less than you make, and if your renovation estimates are way off, you could end up in the hole. If you plan to do a lot of the renovation work yourself, despite a lack of experience, consider budgeting the project as if you’ll need to hire out some of the projects. That way, if you are able to do it yourself you’ll make more money, but if you aren’t, you won’t be in the negative.
Only Considering Your Preferences
When you remodel your home you take your personal wants, needs and preferences into account. When you are flipping a house for a potential buyer, you’ll want to think about what others would want. By researching market trends and design trends you can add elements to the home that will increase it’s value, even if they aren’t your preference.
Not Working with an Investment Lending Company
If you have the cash for your investment on hand, good for you! Most first time flippers don’t have the available cash for the property and it’s renovations, and in those cases they seek a lender for the funds.
When you are working with an investment property it is important to work with a Maryland hard money lender who specifically handles lending for investment. Investment property lenders have experience in the house flipping arena, and can help you determine what type of loan and what loan amount is good for your project.
If you are considering a house flip investment there are many things to take into consideration and carefully plan. Funding is a huge part of whether or not the flip is successful in the long run. Working with the Baltimore investment property lenders at Maryland Private Mortgage can make the process easier and help put your mind at ease. Give us a call today to discuss your project, we’d love to help!
The Maryland Private Mortgage Lending Team