Real Estate
Getting the house of your dreams and taking on a home renovation sounds like THE DREAM. And if you can dream that, being the next house flipping star is not far behind! Tv and social media show the surface of house flipping, but they leave much to be desired. If you don’t know these hidden aspects of house flipping, you could find yourself deep into a project with no way to turn back when it gets too expensive. But the allure of large paychecks is often too hard to dissuade the interested. If a renovation is in your future, or if you are thinking of getting into the world of flipping, here is the side that no one likes to talk about.
Finding Contractors Who Do Full Home Renovation
Hiring a quality, affordable contractor is no easy task. Ever notice those shows use the same handful of people every time? They have people they trust who are within their budget with teams that do a great job! When in the home flipping business, you need to be able to connect with people locally. It’s important that you make plenty of personal connections. The connection you choose can make or break a flip. People who have been in the industry have been around the block and have great contractors on their team. They keep them busy so they don’t go looking for someone else. Finding the right people to flip a house can be a long, difficult, and expensive process.
Money Pits
No one wants to think about this, but there is always the potential of buying a money pit. When you look at renovating a house, you likely haven’t looked much further than skin deep. Hiding behind walls can be costly renovations that you need to take care of. Water damage, damaged electrical, new insulation or drywall, termites, mold, you need a new foundation, etc. If you didn’t leave plenty of room in your budget for unforeseen costs, your dream of renovating homes can quickly become a nightmare.
Nitty Gritty Details of a Home Renovation
Just like how you may not have thought about those potential costly aspects of a house flip, you may miss out on important details! A fresh coat of paint and new cabinet doors is not all that comes with a home renovation. It’s definitely not the fun part, but you don’t want to miss them. You need to ensure the insides of the home work such as electric and water, that toilets, lightbulbs, and shower heads, faucets are all bright and shiny.
If you intend to change the floorplan, you need to know how the home was put together to determine if what you have in mind is feasible. Understanding the inner workings like septic systems and where the water comes from can also affect your budget. A beautiful looking house is one thing, but all of the unseen foundational pieces need to be invested in first so you can put the beautiful home on top. Anything that you leave behind will be found during an inspection.
Time
It’s super nice to have an entire home flip happen in 60 minutes or less when we watch it on TV. While we all know it takes longer than that, do you really know how long? Our typical renovation, from the time of purchase to us being able to sell the property, is 6-8 weeks. All of those nitty gritty details can take weeks to months to get approved and put together. If on the off chance you buy a money pit, the time to do this gets even longer as unforeseen projects start to pop up. Holding onto a house for that long for many people is not feasible.
Unseen Expenses of a Home Renovation
Budgeting for the renovations is only part of what you need to budget for when you plan on starting to flip homes. When you purchase a home to renovate, you will end up turning around and selling it. In the meantime, however long you own the house, you will be making mortgage payments. When you sell the house, it’s going to come with closing costs and commissions. Selling is not free!!! Don’t forget to add in these costs when considering what you may make once the house is able to sell.
In The End
When it comes to flipping, it takes the right person with the right amount of patience and tenacity. It takes you being able to take some wins and some losses. Since we are in the home flipping world, we can attest to our love for the industry. But we can also say, it’s not for the faint of heart! If you plan on joining us, we look forward to beautifying our communities with you!