The Biggest Rookie Mistakes People Make in Flipping Real Estate

You may need to know a few details as a beginner flipper. Details that will help you succeed and increase your profit margin. Glenn and Amber Schworm, founders of the Home Flipping Workshop, inform you about the biggest rookie mistakes when flipping real estate.   

This video titled, The Biggest Rookie Mistakes People Make in Flipping Real Estate, will help you avoid some of those significant pitfalls. 

You will be disappointed if you have not prepared a plan or strategy on how and what it will take to implement a profitable flip. 

Taking steps towards buying and selling property to flip without doing your due diligence of research is unrealistic and a recipe for failure. 

Flipping real estate looks and sounds fun and appealing. For those who love a good project, flipping will allow you to do what you love and make money.

Yet, it will serve you well to be mindful that there are some downsides you may want to avoid, like those rookie mistakes.

Rookie Mistakes

Even though you are a rookie at flipping, some people would like to tell you about the hazards and mistakes you could encounter. However, there are warning signals that will help you avoid unwanted errors.

You are overpaying for a property. It would help if you refrained from buying a property that will not allow you to pay for the renovations. Always remember, you want to buy right!

Hire professionals and not cousins and uncles to do the work. These kinds of mistakes could affect your overall budget. Someone could see subpar work that could cause you to lose a potential buyer. 

Being a rookie flipper, you should learn as much as possible from those who have made mistakes and were still able to create and grow a successful business.

Also, as a rookie flipper, you should never bite off more than you can chew. Focus on one property at a time, the right property, in the right area.

Never overprice the property you are trying to sell. Do your research and price according to the market in that area.

Do not have your heart and mind set to the point whereas you buy too high and give in to the seller’s will. Remember, you want to be able to make a profit.

Just to recap these six professional tips for flipping houses:

1. Don’t overpay for the property
2. Avoid excessive renovations
3. Hire professionals to prevent subpar work
4. Don’t bite off more than you can chew
5. Never over price a property
6. Negotiate the sell wisely

Your Bottom Line

Some say that an investor should not pay more than 70-percent of the ARV (after-repair value) of a property that does not include the repairs and renovations needed. 

When starting, you should not put too much money into your first property. It is not just about the curb appeal and high-end furniture. It is about the basics, which is selling for a profit.

Buying low and selling high is the goal. 

Learn the best strategies to reduce your monetary risks and increase your return possibilities.

Renovating your property to flip can make you money or break the bank. You need to know how much value the renovation will add to the property. 

The materials and labor are typical costs in a flip, such as;

  • Building supplies
  • Appliances
  • Skilled Labor
  • Cosmetic Renovations
  • Landscaping
  • Carrying Costs
  • These costs will vary per the condition of the property purchased. Your bottom line is essential to your profit margins.

    Leave it to the Homeowner

    Another significant rookie mistake is renovation ideas of what you want instead of the potential buyer. 

    The property is for sale to someone else, not for you to occupy as a resident. Let the buyer spend on the expensive things, not you.

    Your goal is to make a profit and not over-improve the property. Purchasing upscale finishes and materials, high-end appliances, and expensive flooring is unnecessary.

    Using quality materials is fine, but the strategy is to make your flip comparable to similar properties.

    You want to attract multiple buyers. Giving them a neutral canvas allows them to envision what can be. It is easy to get carried away trying to make everything look perfect, but at what cost to your budget?

    The goal is to get the maximum amount on your return which is your flip, by spending the least amount of money on the minimum amount of work.

    Sound Business Decisions

    Before making those rookie mistakes, make sure that you have a plan. Having a plan can maximize your property flipping potential. 

    Do your homework. Creating a plan that will function as the blueprint for your real estate flipping business is essential to the success of your business.

    Do not make reckless decisions when renovating. Do the research on the property before buying it so that you may know if it is a good investment for you. 

    All flips are not the same. Making the right decision will help reduce the possibility of you paying the carrying costs such as the utilities and taxes for the property. 

    By joining Glenn and Amber Schworm for their upcoming Home Flipping Workshop, you are allowing them to help you make sound business decisions and not rookie mistakes.

    You will learn how to maximize your profit and create a plan that will bring you success in their 3-day course.

    We look forward to hosting you at the upcoming virtual Home Flipping Workshop.