According to a study compiled by ATTOM DATA SOLUTIONS, the house flipping report released in 2020 showed the highest rise in the industry since the second quarter of 2006. As more and more entrepreneurial-minded investors turn to house flipping to pave their way toward financial freedom, it becomes increasingly important to avoid some of the most common house flipping mistakes.
We’ve compiled four key house flipping mistakes that fix-and-flip enthusiasts around the country are commonly falling prey to. With knowledge comes power as well as a larger Return-on-Investment!
Understand Your Budget + Renovation Requirements
First and foremost, house flippers need to approach each project with the right mindset by understanding their budget as well as the renovation requirements in front of them. A common mishap that newcomers and veterans alike will experience, underestimating your renovation budget can lead to a loss on your property and a blow to your morale.
Work with a budget-repair worksheet to properly track the necessary renovations for the flip to become successful. Consider hiring a professional home inspector to look over the property for the most accurate information.
Common Ways to Blow a Budget: A Leaky Foundation, Termite Infestation, Asbestos.
Avoid Overpaying For a Property You ‘Like’
House flipping professionals need to quickly learn to divorce their feelings from their work. Buying homes can become addictive, and it is easy to create an attachment to them. However, these attachments can hurt our bottom line by influencing our willingness to overpay for a property that we enjoy.
Aspiring house flipping professionals will learn early on to avoid letting emotions cloud their judgement. Stick to raw numbers offered by appraisers and home inspectors. There are always new opportunities on the horizon so long as we are smart with our investments.
Lackluster Property Location
So you’ve found a gorgeous home with pristine wooden floors, an extra bathroom, and a sprawling backyard. The only problem? It’s in the middle of an area that is seeing depreciating home prices. The wrong location can quickly derail a property investment. Before signing on the dotted line regarding a property purchase, make sure to take the surrounding areas into account.
Talk with a realtor or search up comparable sales in the area to see how much a property is being flipped for. Look at how long houses sit on the market, how close the nearest grocery store is, and the proximity that a home is in relation to a school. Every little thing matters.
Avoid ‘Over Improving’ a House Flip
Finally, house flipping pros need to learn early on that they can’t over-improve every property they invest in. Over-improving properties can include adding amenities, upgrades, and materials that don’t mesh with the value of the home.
Instead of focusing on flourishes of wealth, make sure your rehab has all the necessities upgraded to compliance with modern standards. An improved AC system will sell your home faster than a granite countertop.
Budget For Success With a Loan From Hard Money Lenders, AZ
When it comes time to find the hard money loan for your next house flipping project, make sure to turn to a team that you can trust to get the job done right. Hard Money Lenders AZ is the top-rated Arizona hard money lender on Google and the #1 destination for Arizona-based fix-and-flip housing projects.
Contact Hanson Capital at your convenience on their 24/7 line to get funded, today!