September 5, 2019
With low-interest rates and home prices on the rise, many people are turning to flipping houses, whether it be for their own use or as a revenue stream. Flipping can be a very profitable business if done the right way, but there are some things to avoid. Some mistakes could wind up costing flippers serious money in the long run, and should be avoided at all costs. Let’s look at some things buyers should never do when flipping a house.
NEVER: Underestimate Resources
Underestimating resources is a huge problem for some inexperienced flippers. Whether it is underestimating the amount of money required to finish the project, or the amount of time necessary to finish the project, not having a clear understanding of the scope is a mistake flippers should avoid. Before purchasing a property, it is essential to have a thorough estimate of the cost of renovations as well as a generous timeline for completing the renovations. Having a good understanding of the costs associated as well as a buffer for unexpected expenses is an essential part of a profitable flip. Likewise, any time estimates should be generous so the project doesn’t drag on longer than expected.
NEVER: Avoid Doing Your Research
Going into the business of flipping houses can be daunting. Everyone has to start somewhere, so to some degree, first-time flippers are frequently lacking experience. But just because you haven’t flipped a house before doesn’t mean you can’t work with someone who has experience. First-time flippers would be wise to work with someone else who has been through the process before. Likewise, for flippers who plan to do the renovation work themselves, be sure you have experience with general renovations. Flipping a house for profit is not the time to learn how to add walls and install tiles.
NEVER: Rush on a Property
One final mistake that can be a major problem for a flipper is rushing on a property without having all of the information. Yes, flippers need to move quickly to get a property at a good price without someone else buying it first, but that doesn’t mean it is wise to go about the process blindly. When choosing a property, make sure you have time to look it over thoroughly so that you can make accurate renovation budget estimates. The goal of a house flip is to be profitable, and by buying a property without analyzing the cost of renovations and the potential sale price, you can easily buy a house that will cost you time and energy with little to no return.
ALWAYS: Work with a Reliable Maryland Mortgage Lender
Flipping can be a great revenue stream for those who know what they are doing. Not having experience and underestimating time and money are major problems for flippers. If you are looking to flip property, you should understand your financing options. At Maryland Private Mortgage we specialize in construction loans in Baltimore and we’d love to help you with the financing for your next investment. Contact us today!
The Maryland Private Mortgage Lending Team