Flipping Properties Is Harder Than You Think

Posted on February 11, 2008
Filed Under Real Estate |

It’s all the rage, isn’t it? During the boom years of real estate, everyone wanted to flip real estate.

TV shows came out like ants to a picnic, everyone claiming to have the answers to the flip that house puzzle. If only it were so easy! fix & flip is harder than one might imagine.

So many people followed their limited guidelines with flipping homes. Most ended up losing their shirts, and even their primary homes because of real estate losses. Because they didn’t know the intracacies of real estate, they just went out with the bare minimum knowledge, wanting to make their life fortunes trying to flip real estate.

Yet there are more pitfalls to flipping properties than you might imagine. First and foremost, if you fail to catch the property at its lowest while the market is on a gradual upswing, you will find that flipping property is not as lucrative as it could be. Secondly, if you are flipping real estate that fell behind schedule while it was being remodeled, you run into the risk of not only catching the tail end of the house flipping boom in any particular neighborhood, but furthermore being forced to assimilate negative cash flow for longer than you bargained for.

You really do need to work with a team of contractors. Otherwise, you’re bound to get tired and frustrated when you try to flip real estate.

You’ll have multiple teams of contractors for each city in which you are flipping homes. Each team should work to a tight schedule that has their work done in no more than a couple of months.

When you spend too much time flipping homes you will end up losing money, which is NOT the reason you are out to flip real estate.

There’s a lot that can go wrong: absent contractors, stalled supply shipments, inclement weather, and of course labor disputes are the bane of existence for anyone engaged in the business of real estate investing, flipping homes and also renting.

Think before you flip - real estate is more complicated than you anticipate! Do not simply look at the obvious pitfalls - those that are the ones most commonly rumored to go wrong - but instead focus on the little problems that the “flip that house” shows on TV do not alert you to: the home inspector who will not let you flip this house until you undo years worth of do-it-yourself home improvements that are not up to code. Similarly, your dream of flipping homes will quickly crumble if the property is located in an area that is known for its flood or fire dangers. Finding buyers becomes harder in the aftermath of events that garner a lot of news coverage, and while the supply of real estate for flipping houses is plentiful in some such areas, the possibilities of realistically flipping properties in a short period of time are very limited.

Of course, when flipping homes you must know the taxable value of the home. Far too often those engaged in flipping properties do not know how much the home sold for the last time it was on the market, and suddenly real estate flipping turns into a study of becoming upside down in an otherwise nice home.

How to flip real estate is a question that takes a backseat to property flipping at all costs. The last thing you want is a bankruptcy on your hands if you have to carry multiple mortgages you can’t afford.

Do yourself a favor. Learn how to flip real estate from people who do it for a living. Don’t waste your time with get rich quick schemes that don’t really work. Check out our real estate investing training courses, especially our 6-month real estate investment training course.

Tags: Real Estate

Flipping Properties Is Harder Than You Think

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