Avoid the Pitfalls Most House Flippers Overlook
Those popular house renovation and flipping TV shows make it look easy. Just find a house, fix it up, flip it and make a bundle of money. Well, flipping houses can indeed be exciting and profitable but it isn’t easy and there are some pitfalls to avoid.
How Many Houses Are Flipped Each Year?
Flipping houses has become a big deal. According to a report by ATOM Data Solutions, 241,630 houses and condos were flipped in 2020, representing 5.9 percent of all houses sold. The average profit margin for flipping houses after all renovation costs are typically between 15 and 20 percent. But inexperience and mistakes can lower the resulting profits.
Pitfalls to Avoid in Flipping Houses
Avoid these pitfalls to experience success and spare some pain in flipping houses:
Not having a well-considered business plan. If it looks like a hobby on TV, it is not. A business plan should consider your financial resources, your time investment, the market(s) that you want to consider, any niche approaches that may lead to success, and a timeline for your flipping activities.
Not understanding the market. It is critical to go into the right neighborhoods, to understand how fast properties are moving, and what comparable selling prices are like.
Not having enough money. Working in real estate is expensive. It takes money to buy a property and fix it up wisely.
So, getting financing for all of this is critical.
Not getting a home inspection. Also, underestimating the renovation costs.
Not having enough time (or patience) to manage all the details in flipping houses.
Not using skilled resources. It takes professional builders, carpenters, electricians, and plumbers to renovate a house.
Not getting property insurance.
Seek Expert Financial Assistance
Contact Summit Commercial Capital, based in Broken Arrow, OK to get the right business loans to reach your business goals. We offer a comprehensive portfolio of business loans so we can find the right financial solutions for your business opportunities and take your business to new heights.