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Sob Stories About Property Flipping
By Vic Hurlstorm | November 18, 2008
What you don’t see on many of the television shows about flipping houses are the many sad tales of promising flips gone wrong. These epic tales of woe are often the precursors to financial hardships for quite some time as those who fail at their property flips work on recovering from their heavy losses and moving on with their lives. Some are hit harder than others but the snowball effect of a bad flip are often not even hinted out on the prime time televisions shows that are so proud of the many success stories that arise because of serious and studious efforts in the house flipping arena.
If you are planning to flip a house for a real estate investment you really need to take a step back and decide that you are absolutely not going to be one of the house flip sob stories that are rumored about in Internet chat rooms. In fact, you want to be listed among the success stories. Unfortunately that takes a great deal of proper planning that is almost never shown on these television shows. In fact, in order to put your best effort forward you will need to devote as much time as possible to studying and researching houses, prices, and property values in your area before you ever start to search for your first house to flip as you will need to invest in the whole process of working on your first flip. In other words, months worth of planning need to go into your first property pick in order to lower the risk of failure and to greatly improve the odds of success.
The second thing you will need to do when planning or researching your first property flip and avoiding a sob story is to be realistic about the outcome and avoid great expectations. With your first property flip you will be damn lucky to make any money at all. If you are expecting to make more money on your first flip than you made last year as a full time employee you might need to make other plans. The first flip rarely goes as expected.
Third, you will need to put back at least twice as much money (or even three times as much) as you think you will need for the improvements on the property in order to cover the actual costs that you will incure. There are inevitably tools, permits, supplies, and labor that wasn't counted on in the initial budget figures as well as the tendency to seriously underestimate the cost of the materials that will be needed in order to get the job done. If you can't afford to spend that much and then walk away without a loss then the property you are considering probably is not the best property for your first flip.
Finally you need to plan everything. Every day will need to be planned before you show up and try to work on the house and you will need to have all the materials and supplies you will need on hand such as coffee, lunch, drinks, tools and supplies. To many trips to the hardware store, lumber yard, lunch and coffee breaks will quickly eat up the hours of a day and any productivity that might have happened during that day. Avoid these costly delays by proper planning and you will discover that you have a real estate investing success story worth writing home about.
Please make sure to check out my real estate blog at http://cashmoneyhousebuyerblog.com
Topics: Real Estate Investing |
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