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How to Flip Properties with Ease

Young Couple Stressed Over House Flipping in St. Clair ShoresHouse flipping in St. Clair Shores appears to be an uncomplicated idea: purchase a bargain property, do a little remodeling, and then sell it for a much higher price. There is no denying that house flipping has provided substantial returns to many investors across the country. But flipping houses also involves a high degree of risk; a flipping project can suddenly become a nightmare if you are not prepared. If you decide to try your hand at flipping houses, avoid these typical missteps, or you might find yourself in a real flipping nightmare!

Over-Improving the Property

Not understanding how much to improve the property is one of the most typical mistakes that can swiftly turn a house flip into a nightmare. Current house flippers, particularly, often go too big in renovations, spending much more than necessary. Overspending can lead to budget troubles and decrease the profits when you sell. Unless the property you bought is in a very high-end area, you don’t have to go too upscale. The best improvements will bring the property up to the level of the other homes in the neighborhood – but not too much beyond that.

Dealing with Property Damage

Another reason that a house flip can become a nightmare is if you encounter vandalism, theft, or property damage. If a property has been sitting vacant for a prolonged period, it may be more open to this problem. House flipper Carol Sankar of Charlotte, NC, describes one project in which the home was burglarized multiple times during the remodel. One day near the end of the project, she made it to the house to discover that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator also disappeared. Because the property was in an area with few security measures and a low police presence, there was little Sankar could do to take back her stolen materials and appliances.

Costly Mistakes

A third situation that can make a house flip haunt you is when making expensive financial blunders. As an illustration, house flipper Daniil Kleyman in Richmond, VA, purchased a project house for what he assumed was a wonderful deal. An experienced investor, he did a preliminary market assessment on the property and anticipated being able to remodel and sell it for five times his cost. Unhappily, Kleyman made a series of errors that ended in losing money on the flip.

Not only did the first contractor he appointed walk off the job with his money and without executing the job he was hired to do, but Kleyman had also used the wrong comparable properties when estimating his post-remodel sales price. He had to list the property for far less than he had expected. And then the property was burglarized, stripped to the walls, plumbing broken, and flooding in the basement. After fixing the damage and replacing the stolen appliances and fixtures, Kleyman was eventually able to sell the house at a loss to a buyer who was not interested.

Avoiding Flipping Nightmares

Stories like these reveal just a couple of the concerns that come with flipping houses for resale. These investors would have profited greatly from accurate market data, proven construction professionals, and the expertise of property management professionals from day one. In Kleyman’s situation, particularly, by first contacting an industry expert like Real Property Management Silverstone, he would have acquired a detailed market assessment before buying the property. He would have understood the property’s market value in the early days, maybe influencing some of his actions afterward.

A professional St. Clair Shores property manager would have also given Kleyman the names of trusted remodeling and repair vendors in his area and would have checked in with those vendors frequently, considerably minimizing the odds that the contractor he hired would take his money and run. In the end, the team would have accurately priced and marketed his new property for him, securing quality tenants willing to pay a competitive monthly rental rate for as long as Kleyman chose to retain the home. The value of this information and expertise is hard to overstate – it could mean the difference between a great house flip and a flipping nightmare.

With local property management on your investment team, you’ll have the support of experts dedicated to making every one of your properties one of the best long-term investments you can make. For more information, contact us online today.


Originally published on July 12, 2019.

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