To Learn How To Flip Properties, you must first learn the Doâ€™s and Donâ€™ts of the business
In the last half decade, a great number of people have started to join the dynamic field of house flipping. House flipping has the potential be an incredibly profitable industry for new investors with a lot of ambition.
However, many new investors jump into a house flipping project without realizing the full gravity of the situation. They often make rookie mistakes that theyâ€™ll regret later. As a beginner, you should try to avoid these mistakes by researching and learning as much as you can about how to flip properties.
How To Flip Properties | The Doâ€™s And Donâ€™ts
If you want to learn how to flip properties, it would be smart to see what problems other just like you have run into. In the following section, we pair a common mistake (donâ€™t) with its alternative solution (do):
Donâ€™t Go In Blind
What many people believe starting out is that house flipping is something that can be learned in the moment, during each step of the process. These people believe that they can learn how to buy a house when negotiating a deal and can learn how to rehab when up to their ankles in plaster and drywall.
While some minute aspects are always learned in the moment, if you take your time too much, you may end up losing a great deal of money. Every day you sit on your property you are loosing money from the costs of homeownerâ€™s insurance, utilities, maintenance, and any loans that may be involved.
Do Understand Everything Involved Before Buying A House
Always try to remember this important rule: doing your research in advance will save you money in the long run. You should determine the costs of each and every part of the house flipping process and make sure you stick to a lucrative business plan. If you arenâ€™t going to make money during after you sell, whatâ€™s the point of flipping?
Donâ€™t Just Look Up The ARV Online
One of the most valuable points that is emphasized when across the house flipping community is that you should never spend more than 70% of the ARV or â€œafter repair valueâ€ when buying a property. While you might follow this rule by the book, it means almost nothing if your ARV estimate is incorrect.
What many people do is look up the ARV of other recently sold houses in their area online. While this is a good start, these prices might not be a reliable gauge. Maybe a comparable house on the same street sells for a certain amount so you assume that your house will be worth the same after renovations. Whoops! You accidentally overlooked the fact that the house you found on the Internet faced a lake and yours faces the freeway. If this were the case, your house would be worth considerably less.
Do Get An ARV Estimate From A More Reputable Source
Instead, you should make sure you seek out a professional in the field like...