During the process of a house flip there’s plenty of large decisions and costly choices that are happening. While those can be a big deal there are also some smaller events that individually, or collectively, can really hinder a flip. Both from a timing and a profit standpoint.
Many of these can be incorporated into the planning process so they’re sure to be included. And a few are more centered around mindset. When you believe one way about something it can be difficult to see the other perspective…unless you’ve been there before. There were many mindset and belief challenges I experienced that have thankfully gotten me to a place where efficiently running projects and avoiding as many delays as possible has increased the number of projects we’re able to work on.
Even if you’re in the stages where you’re just starting or wanting to increase the number of projects, there’s likely something in these tips you can add or modify to help your projects too.
1. Forgetting About the Permits
The idea of unlicensed work may not seem like a big deal but permit problems can lead to lawsuits if potential buyers discover defects late in the process of a sale. If you’re doing any work make sure you know what the city expects in terms of permits and inspections. Especially when working on a home’s plumbing, gas or electrical systems, there’s going to need to be code followed and the proper process followed.
2. Skipping the Conversation with a Local Real Estate Pro
The Internet is a great source of market information, but it shouldn’t be your only source. Someone who is familiar with your local market can help you with everything from finding your flip in the first place to calculating its ARV (After-Repair Value).
3. Taking the Finishes Too Far
High-end flips come with high expectations. When buyers don’t connect with your big design decisions they may choose to pass on the house altogether. As much as you do, they may balk at your big ticket altogether.
4. Neglecting Easy Fixes
Sure, an entire whole house renovation has some “wow” factor but there’s still some details you need to include. Cutting corners, at any price point, will stick out. Small items like paint touch ups, caulking and hardware are all small and quick to address. When there are unfinished items it can actually start to create doubt in a buyers mind about the overall quality of the project so they’re key to the complete renovation.
5. Jumping into a “Must Sell” Flip
If the real estate market in your area suddenly shifts can you pivot too? If you had to go to a different plan and say, rent the property instead, would that work? When analyzing any purchase for a flip its also a good idea to know the rental rates if for some reason you had to move to a plan B.
6. Staging Solo (at first)
Bringing in a home stager to get your first flip for open houses is an investment that will return in a few ways. Not only does it allow your flip to shine in person but it will also make for great photos. The largest opportunity is that you will learn how they set up your house to show its full potential. These are tips that you can use in the future and will provide insight into the areas that are of focus for potential home buyers.
7. Race Against Time
What’s even worse than making mortgage payment after mortgage payment on a home that isn’t supposed to be yours for long? Falling short of the profit you should have made because you prioritized speed over a job well done. Psst: Buyers (and the inspectors they’ll call in) can tell the difference.
8. Using Numbers that Change
Speaking of figures, the temptation to overestimate your potential property’s ARV in order to justify a higher maximum allowable offer (MAO) can be tempting, particularly for first-time flippers who find themselves being asked to pay slightly more than they planned—but it’s often not worth it. Factors outside your control could lower your ARV by the time you’re ready to sell your flip. So if you’ve already exceeded your original estimate, the numbers .
9. Forgetting the Landscaping
Overhauling an entire yard worth of greenery isn’t an inexpensive task. Most homes have yards that have been neglected and endured construction which is never kind to yards. The curb appeal of a property includes the yard. If the weather allows it’s worth spending some of your budget here. Cleaning up debris, adding sod or seed, bringing fresh mulch to beds and potted flowers can go a long way when it comes to upping the curb appeal factor.
10. Overestimating Your DIY Ability
You don’t know what you don’t know. That is especially true when you’re flipping a house with little to no experience. The idea that you can flip an entire house on your own is an idea that may not work for a multitude of reasons. It’s fine to maybe take on a task or two if you’re skilled. If not, leave it to the pros. The results will be better and will likely take less time.
11. Ignoring the Neighbors
Buying the underpriced, ugliest house on the block is many a flipper’s favorite trick—but it’s easy to forget that though your place will be rehabbed and lovely by the time you list, other eyesores in the same neighborhood can impact its desirability (there’s a second-ugliest house out there, too). You want a diamond in the rough, but it shouldn’t be too rough.
12. Cutting Corners in the Bathroom
If your floor plan and budget can accommodate a full, modern bath, it’s worth your time. Many real estate experts argue that bathroom renovations provide returns on investment (ROI) that are comparable to kitchen renovations. A woefully outdated bath, by contrast, can cause a buyer to pause. Updating an existing bath or adding a new bath are easy ways to add big value to a home. If you want to know exactly how much, make sure to check your comparable market data.
Ready to take that next step when it comes to flipping?
That’s why I’ve got additional resources to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home.
There are several videos available on finding houses, renovations, and funding on the Threshold Homes YouTube Channel. Check out your favorite flipping topics and new videos weekly.
You can’t close a successful and profitable flip unless you start. What is your biggest challenge with getting started house flipping? Let me know. It may be an area I’ve also had questions about myself. I’m here to help so drop me a DM.
Want to buy a property and renovate it?
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Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the house with the most “flip” potential. For more inspiration follow me on Pinterest @thresholdhomesmn
