Don’t Make These Investing Mistakes | Success Path

As with any home renovation project, things don’t always go as planned. Even the experts at Success Path with experience flipping houses know to plan for some unexpected expenses that will inevitably pop up. It’s always smart to include a cushion for these costs in your budget, and to keep them in mind as you estimate your profit. Generally speaking, this makes the process of house flipping quite simple. If you can sell the house you flip for considerably more than you put into it, you’ll make a profit. However, this only works if you avoid certain mistakes that can disrupt your budget and eat into your profit margins.

Fail to plan, plan to fail

Before you purchase a home, make a plan. While purchasing a foreclosure can sometimes depend on your ability to move fast, it’s important to avoid flying by the seat of your pants.

Evaluate the work that needs to be done and make sure you have a clear and accurate idea of the costs required to do the work. This can help you stick to your budget and maintain your ideal profit margins as you work. Have the home inspected and make an exhaustive list of every repair and renovation the house may need. List realistic costs next to each item, and if anything you should overestimate rather than underestimate the costs. This is a process that will get faster and easier with experience, but that should precede any house project you undertake.

Costs are not the only aspect of house flipping you must consider. Timing is everything when it comes to buying and selling houses. As you assess the repair and renovations, make sure they can be done according to your timeline, and that your contractors are on board with the workload, timeframe, and budget. Failing to consider the time needed to redo a roof, fix a plumbing issue, or another extensive project can eat into your profit margins as you miss valuable selling opportunities.

Consider Your Surroundings

The entire concept of flipping a house is transforming a run-down eyesore into an attractive and appealing home, but this should be done according to the standards set by the rest of the neighborhood. Before you make any concrete decisions about materials or designs, do an assessment of the surrounding homes and neighborhood. Do they all follow a certain style? Do they all seem to use the same materials?

You must always put yourself in the place of the homeowner as you consider renovations and repairs. If you were driving through a neighborhood and saw the house you just flipped, what would be your impressions? That it sticks out among a neighborhood of run-down houses? That its style is out of place? If the renovations you have in mind for your house turn the surrounding houses into eyesores, you may need to reconsider some of your design ideas. Do your best to match the styles of the other houses in the neighborhood. A house that looks out of place may take longer to sell, and the longer your house stays on the market, the smaller your profit margin becomes.

A good idea is to befriend the neighbors in the area. Let them know your plans and get them excited about a newly renovated home in their area. They may be one of the best marketing tools you have, because word-of-mouth is a strong selling technique, and who doesn’t want their own friends and family to move closer?

Following these two good practices can help your flip go further and prevent unexpected costs that can eat into your profit margins.

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