It’s easy to get carried away in the excitement of a first-time home-flip. There are so many opportunities to buy new real estate and even more ideas on Pinterest on how to remodel spaces that will make you overly confident enough to blindly rush into a remodel. It can often feel like the world is your oyster and all you have to do is make a few little tweaks and your Pin board will come to life. Before you know it, you’re knee deep in renovations and possibly a surmounting debt for costs your Pin board forgot to mention. Here are a few tips to keep in mind before you let yourself get caught up in the flippin’ excitement.
- Don’t overdo it.
It’s important to be self-aware when it comes to flipping. This is a place where you do not want to be overly ambitious. Taking on more than you can chew may result in your finances being put through the muck. If this is your first time flipping a home don’t buy a gut-rehab or a tear down. A home that you think has potential but is in need of a lot of work may seem like an digestible idea at first, but repair costs will often continue to add up and contractors’ rates can be difficult to manage as they tend to evolve with new issues or unplanned support.
Choose a home with good bones and make sure there aren’t any foundational issues. A small cosmetic rehab is the way to go if you’re new to the world of flipping. Save the homes with more work for when you’ve become an expert!
- Prepare your finances.
The act of buying and flipping real estate can be very expensive and you will need to have money in order to purchase property and pay for repairs, not to mention contractors! Unless, you yourself are a contractor we highly suggest you don not attempt to take on any major repairs yourself thanks to the confidence of a YouTube tutorial. Before you commit to purchasing any real estate ensure that your finances are in order and that you have secured any monetary backing that you may need.
- Don’t use selective accounting.
When you have the chance to look at the final numbers in order to make the real estate purchase happen don’t eliminate certain costs just to make the deal workout on paper. Even if the seller is asking for a specific number. First, analyze your own numbers and look at what you are feasibly able to offer.
- Update the kitchen!
Kitchens usually sell a home. An “ugly” home could have good bones but if the kitchen looks like a lot of work, it’s often the biggest turn off (or on – if it’s up to date). We all know that kitchens, fixtures, and appliances are often the highest selling points of rentals and homes. You may be able to do any small upgrades yourself, such as switching out the hardware. Any big tasks like electrical wiring or swapping out counters should be done by a professionals.
If it takes you seven months to get all of your renovations completed, wait the remaining five months before selling a home so you’ll pay less in taxes on your profit. While flipping homes can be overwhelming with the myriad of renovations and the costs, your first flip should be approached with caution. Afterwards you’ll be able to feel a little more confident in your ability to take on another flip!
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