Wednesday, February 3, 2016

Real Estate Rehabbing or Flipping Common Mistakes



Real Estate Rehabbing or Flipping Common Mistakes

Realestate rehabbing or flipping can be very promising activity to earn enormous amount of money. However, there are some mistakes that you need to avoid to minimize the risks and maximize your success rate.

The most often and first risk that happens is the thinking about the other party has greener grass. That is where you look at another market which promises more profits, more motivated sales, and richer investors. In other words, you don’t target specific farm area close by which makes you difficult in controlling the sales and other operative matters.

The next mistake is to get caught up looking for greener prospects somewhere else. If you focus on elsewhere, you are just delaying your success and making some excuses. You will waste your time to look elsewhere while you can find the most prospective customers in your area. 
When purchasing, make sure that you have the good deal. It is also number one problem often done by starter. Some who purchased the wrong price will end up ugly because they can not arrange the budget for the rehab cost, they end up spending more for operating expenses. The ARV will be high as well as the insurance costs.

Exceeding the budget is the last thing that you want if you want to be successful in this field. This is one of the most common mistakes done by the investor. To avoid this, you should get the exact estimates from trusted contractor. Don’t hesitate to leave the questionable contractor behind. Once you get the exact estimate, you will need to calculate on how much you will be spending for the rehabbing or flipping project. If the budget does not make sense, you should think about it thoroughly.

The other mistake you should avoid is exaggerating your repairs. Make sure that you have researched the other houses in the environment. You need to repair the property based on the class type of area.
Purchasing the property that has critical damages is a big NO NO. This is also one of the most common mistakes done starting investors these days. Many properties are covered with great exterior that often deceives the buyer. They are covered to look like there is nothing wrong with their elements or parts. Thorough inspection is totally recommended if you want to play safe. If you don’t take your time and effort to check some serious damages you will end up in wasting your money for repair expenses. If you are not sure, hiring a professional inspector will solve your problem. The damages of foundation, for instance, can cost you thousands of dollars.
The next common mistake is about assessing the quality of work of the contractor. You can not merely hire contractor just because your friend suggested it. But you need also make some assessment about their quality of work. Specific contractor can be friendly in price but don’t overlook the quality of work. Buyer would not listen to your explanation when they complain about the low quality repairs. Reputable contractor is always top choice but you can also do your own little research to be convinced with the right service. In the end, you must ensure that the repair is going to be done according to the ethic code.


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