It’s the only way to accurately guesstimate what kind of gross return you can expect after the acquisition, renovation, and listing costs.īonus Tip: In addition to looking at the recent sales in the area, your research should also take a look at how current prices compare to the last peak. You’ll definitely want to run the comps before listing the home, but you should also do that before buying. Mistake #4 - Not Running Good Comps Before BuyingĪfter the investment property is bought and the renovations are complete is not the time to run comps for the first time. You may even be able to tell if there’s water damage from the outside. Even if you can’t get inside the home, an inspector can still take a look at the outside to search for signs of structural, roofing, electrical, and foundation issues. It’s a key part of doing your due diligence. Mistake #3 - Forgoing the InspectionĮven in distressed sale situations, you usually have an opportunity to do a home inspection. It’s better to have a home that’s a relatively clean canvas for the buyer to make their own than to turn people off with a distinctly stylized decor. They should know what types of home styles have appeal, the finishes that are most popular and which upgrades will attract buyers. House flippers have to have a finger on the pulse of their local market. You can spend thousands renovating a home in a style that you find to be ideal only to discover that it’s not what buyers like. Mistake #2 - Not Knowing What Local Home Buyers Want Using quality materials is always a good idea, but there’s no need to install radiant flooring, a saltwater pool and marble showers in a neighborhood with $300,000 homes. The best strategy is to make the home comparable to other top-selling homes in the neighborhood. However, in most cases making a flip better than any other home on the block doesn’t have the biggest return. In some high-end markets and neighborhoods, it’s virtually impossible to over-improve a property. Over-improving basically means going overboard with improvements and/or using materials and finishes that are more upscale than they need to be.

Save yourself the money and angst by avoiding these 10 common house flipper mistakes. Unfortunately, many house flippers make costly mistakes, especially when they’re just starting out. Playing your cards right as a house flipper means making a lot of sound decisions.

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