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|Page: Useful Tips for Flipping Houses with Realistic Expectations|
How to go about house flipping process
Thanks to TV shows that showcase the art and science of flipping, many amateurs believe that they, too, can, take on the task of flipping a property with the goal of making a little money for themselves. The trouble is, flipping a house is never as easy as it looks on TV. There are lots to consider and it’s important to go into the process with your eyes wide open.
Television shows will give you the impression that flipping a home is as simple as buying a property, spending a few days fixing it up and turning around to sell it for a huge profit. That’s a far cry from the reality of flipping houses. If what you see on TV seems to good to be true, that’s because it is.
|The goal of house flipping process is to make money, so you have to carefully choose your property to flip (Image by Freeimages.com)|
In real life, flipping properties costs money. It’s important to go into the process with a clear idea of all of the associated costs. These include:
The costs of actually purchasing the property. This could include inspection, mortgage, lawyer fees, closing costs, title searches, survey costs, and more.
Flipping a house brings with it lots of expenses. While you renovation, you’ll have to pay the mortgage, taxes, insurance, etc. on the flip as well as your own housing costs at your primary residence.
When you sell, you’ll have to consider that your selling price will be sliced up to cover things like real estate commissions for agents such as Colin Crowell.
It’s very important to keep track of what you spend during the flipping process. Have a budget and stick to it. It’s very easy for expenditures to get out of control, so you should always keep accurate lists and records to keep yourself on track. When you know how much you have spent during the renovations, you can better gauge how much you will have to sell the house for in order to recoup your costs. The less you can spend on renovations, the more profit you will make on the sale without having to charge an unattainable amount.
|To avoid unexpected, costly and involving renovation projects, inspect your potential property first (Image by Freeimages.com)|
Just as with any renovation project, flipping a house can bring with it unexpected challenges – and expenditures. Because of that, it’s important that you have a reserve fund in your budget to deal with extra, unexpected costs.
For example, what happens if you tear out the kitchen cabinets only to discover that the wall behind them needs to be replaced? Or, what if you take up carpet and discover that the subfloor isn’t what you expected. What if you discover mold? All of these things can easily add up to extra expenses, so it’s very important that you prepare for these contingencies and have money set aside to deal with them.
Flipping houses can be a rewarding way to make a lot of money fairly quickly. To be successful, you’ll have to go into the process with open eyes and with realistic expectations.
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