16 Mistakes First-time House Flippers Make

Not having the finances

Down payment…

…Or full cash price

Insurance

Taxes

Utilities

Labor

Materials

And more

 

Buying the wrong property

You want a home that’s “just right” — not too expensive, and not in terrible shape.

Failing to follow the 70% rule

Don’t pay more than 70% of a home’s fixed-up fair-market value. If you think you can get $200,000 for a fixed flip, don’t offer more than $140,000.

(Equation: $200,000 x 70% = $140,000)

 

Ignoring an inspection

It can be tempting to skip the pre-sale inspection, but that inspector might find a serious problem that’s going to cost you more to fix than you can afford.

 

Failing to secure the right permits

Which permits are you going to need for your upgrades? You don’t want to get started only to discover you might need to redo some or all of it.

 

Multitasking

You may be tempted to flit from project to project so that you can feel like you’re accomplishing something. Instead, make a list of things that need to be done, and if you want to feel that sense of accomplishment, plan to spend your morning working on major projects, and your afternoon on little items that help you feel like you’ve finished at least one thing.

 

Overestimating what you can do yourself

This is a major investment, and you are probably not qualified to do most of it. For your first flip, hire pros and watch them work so you decide if DIY might be an option — next time.

 

 

Not playing well with others

No flipper is an island, and that is especially true for first-time flippers. You’ll need to rely on strangers to help you finish the job.

  • Learn to deal with feedback

  • Manage your relationships

  • Enjoy working with others

 

Running out of time

Overestimate how long you’ll need to finish the job, especially if you’re working by yourself. Leave yourself time to undo and redo some work.

 

Remodeling according to your personal taste

Many first-time flippers forget that they aren’t renovating the house for themselves — they’re doing it for a future buyer. Your preferences could hurt the sale.

 

Neglecting the little fixes

Change the light bulbs, oil the hinges, and make sure everything (everything!) works and works well before you call it a day.

 

Upgrading too much

First-time flippers often don’t know where to stop with the upgrades and do too much, creating a beautiful house that’s over-finished for the neighborhood.

 

Ignoring the outside

Have you paid attention to the landscaping? Put in new sod? Added flowerbeds to the garden, or otherwise improved the curb appeal of the home at all?

 

Listing the house before it’s finished

If you try to start showing the home before it’s actually ready, then all buyers are going to see is a half-finished project.

 

Counting on the market to pull the price up

Housing markets, like all markets, are subject to outside forces beyond your control that you cannot predict. If you’re counting on the market to grow, and that doesn’t happen — what’s your Plan B?

 

Staging without a pro

For your first home, do yourself a big favor and budget for a stager from the beginning. A professional stager will tell a story with the home, tying rooms together with color and texture, and helping buyers envision their lives in your flip.


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