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 legendary tales of misfortune are often the precursors to big financial hardships and for quite some time as those who do not succeed at their house flips work on trying to recover from their big losses and then moving on with their lives. Some are hit a little harder than others but the snowball effect of a bad property flip is often not even hinted about on the television shows that are so proud of the many success stories that arise because of hard and studious efforts in the property flipping area.
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 will definitely want to be listed among the other success stories. Unfortunately that takes a great deal of proper planning that is almost never shown on these television shows. In fact, to put forth your best effort you need to devote as much time to studying and planning properties, prices, and home values in your area before you even begin to search for your first property to flip as you need to invest in the entire process of actually working on your first flip. In other words, several months worth of planning and research need to go into your first house pick in order to lower the risk of not succeeding and to raise the odds of success.
The second thing you need to do when planning your first flip and avoiding a sad tale and a sob story is to be realistic and avoid great expectations. With your first flip you are darned lucky to turn a profit 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. Because of all the unforseen problems, the first property flip very 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 don't have that much or can't spend that much and walk away without a loss then the property you are considering might not be 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. Trips to the hardware store, lunch breaks, and coffee runs quickly kill a day and any productivity that may have been made 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.
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