We’ve all seen at least a few of the numerous house flipping and home renovation shows on television. They make it look so fun and easy to turn an ugly home into a beautiful, picturesque home ready to list at top dollar. If you’re looking to get into the house-flipping business, it’s important to remember that there is more to it than meets the eye. Flipping houses can be profitable if you know what you’re doing, but rookie mistakes are common and can often lead to financial disaster. In this blog post, we will give you seven tips for avoiding those mistakes and flipping your first house with confidence! Hint, hint…some of our tips will obviously include some essential storage solutions specifically for house flippers!
What Exactly Is House Flipping All About?
Before we get into our tips, let’s first make sure we’re all on the same page about what house flipping actually is. House flipping is the process of purchasing a property (usually at a low price), renovating it, and then selling it at a higher price for a profit. The key word here is “profit.” To make money flipping houses, you must carefully consider your renovation budget and ensure that you are not overspending on the property. It’s also important to have a realistic timeline for both the purchase and sale of the property. Depending on whether you plan to buy the house in cash or use a hard money lender, you may also have to consider the interest, points, and other fees that go along with purchasing and holding that property during the renovation. Some other additional carrying costs to think about include your insurance and utilities required during that time as well.
Making A Profit On Your Flip
Making a profit on your flip is all about you fully understanding the numbers, and constantly revisiting your budget to ensure that you’re saving as much as possible, while still producing the best possible results so that you can resale at the highest price. A lot of our tips in this article will focus on ways you can save on your budget during your flip. As one of the best portable self-storage companies out there, we’ve worked with quite a few fantastic house flippers, so we’ve been able to pick up on some great tips that will likely really help you save on your budget. When it comes to making a profit on your home renovation, every penny counts. You’d be surprised how quickly materials, labor, etc., can add up! So let’s get started!
1. Connect with an investor-friendly real estate agent
As a beginner house flipper, you must connect with a high-quality real estate professional in your target market who can help you find great investment properties that are worth your time. You may have found a property that you feel is a great investment, but it could be in a bad location or need too much work to be profitable. A good real estate agent that is investor-friendly has enough time to render competitive market analysis documents whenever you need them so that you can quickly determine the resale value of a potential property, as well as help you navigate the contracts during the purchase and resale. Not only that, but the agent you work with should be willing and knowledgeable enough to offer advice on what renovations might increase the value of the house.
2. Use portable self-storage units to store tools and materials
If you’re planning on doing a lot of the work yourself to save money, then you’re going to need a place to store all of your tools and materials. If you don’t have an extra room or garage that you can use for storage, then consider renting out a portable self-storage unit. This will allow you to keep your tools and materials close by so that you can easily access them when you need them, but out of the way during the actual renovation process. Plus, it’s much more cost-effective than renting out a storage unit at a traditional storage facility. Another plus is that you won’t have to worry about commuting between a traditional storage unit and the property.
3. Buy tools used at pawn shops or local online marketplaces
As a beginner flipper, you will likely need to do a lot of the work yourself. Not only that, but it might be the first time you’ve done some of the projects you’re about to undertake, which means that you may need to pick up some additional tools not already in your collection. If that’s the case, we highly recommend exploring local yard sales, online marketplaces, and pawn shops for used tools to help save on your budget. You’d be surprised what kind of tools you can find!
4. Get comfortable trying things you’ve never done
As a first-time flipper, you’re about to take on DIY projects you’ve never attempted before. The important thing is to have confidence in yourself and go for it! You will have to get your hands dirty to save on your budget and make a profit on your first few flips. Some projects you might have to do DIY might include deep cleaning, painting, installing new bathroom vanities, installing new toilets, cutting grass, making flower beds, ripping out small trees, clearing brush, and more.
5. Don’t be afraid to bring in the professionals when necessary
One of the greatest mistakes beginner house flippers make is taking on far more than they should as far as the renovations go. Sure, you definitely should try to do as much as you can on your own to cut costs, but never to the detriment of the final result. For example, if you have never put in flooring, kitchen cabinetry, or done tile work, that is something you should most likely not attempt because your potential buyers will be able to tell that the finished product wasn’t done by professionals. You should also avoid attempting to do plumbing work or electrical work if you don’t have any experience working in these areas. Not only can you cause serious and costly damage, but you could end up putting yourself at risk. Remember to be realistic about your abilities and take your safety seriously!
6. Don’t go overboard
One of the most common mistakes beginner house flippers make is going overboard with the renovations. They think that they need to do a complete gut job in order to make the property look amazing and increase its value. However, this is usually not the case! Sometimes all a house needs is a fresh coat of paint, a new carpet, and some minor cosmetic repairs in order to look its best. When it comes to flipping houses, less is often more. You don’t want to spend too much money on renovations that you won’t be able to recoup when you sell the property. If you’re working with a good realtor, you can always consult with them about your renovation ideas to see what they believe will actually add value to the house when it’s ready to list.
7. Give yourself wiggle room and a plan B
When it comes to flipping houses, things rarely go according to plan. There will be unforeseen delays and problems that pop up along the way. It’s important to give yourself some wiggle room in your renovation timeline as well as in your budget. This way, if something does happen, you won’t be scrambling to try and figure out a solution. Additionally, it’s always a good idea to have a plan B ready just in case something goes wrong with your original plan. For example, if you’re planning on selling the house after the renovations are complete but it ends up taking longer than expected, you might need to consider renting it out instead so that you can still recoup some of your investment costs.
We hope these tips have helped you as you begin your journey into flipping houses! Remember that Badger Box Storage is here to help you with all your storage needs during your home renovation. If you’re looking for a safe, weather-proof mobile storage container for your flip, don’t hesitate to contact us! Good luck!