Why a Property Manager and an Interior Designer Is a House Flipping Dream Team
House flipping is a hot new way to get into real-estate investing. It's when you buy a house, fix it, and sell it for profit. The trick is to make value-adding additions to the property so it becomes more desirable. You succeed in making it look brand new, and then you can sell it for profit.
Do It Yourself
A lot of people are jumping onto the do-it-yourself house flipping bandwagon. It does seem attractive at first not to have to pay any expensive salaries. However, lacking the skills and experience can make your house flip a flop.
Helios Property Management are sharing with us some common house-flipping mistakes made by beginners and DIYers:
Underestimating the Timeline
Many beginners are excited and do incorrect calculations in their heads. They end up with an incredibly short flip time. They imagine they'll flip the house in three or four months.
The reality is that the remodeling process does go several weeks longer than planned, and then the house sits on the market for a month or two. Then maybe a buyer who showed interest would back out, landing it right back onto the market again.
Underestimating the Rehabilitation Costs
The untrained eye cannot decide how much fixing up a house will cost. Many people fail their first few flips because they keep thinking it will cost significantly less than it does. The golden rule regarding renovating is to expect to pay more and not less.
We understand that the margins are crucial in house flipping. However, that does not mean that you think up an unrealistic number as a budget. You will never scale your business if you think you can do it within budget. You can only work on one house at a time, not ten or a hundred.
You tend to make many unnecessary moves when you don't understand the real estate market well. Many beginners don't know where to stop when it comes to property rehab. They keep going and going and making it more and more lavish.
However, some houses have to cap their price because of the area and other factors. Then you have a super luxury house forced to have a middle price. Thus your profit margin is too thin to reward the work put in. You could go into loss.
Pricing the House Incorrectly
When you flip a house, you must understand the local real estate market. What kind of prices are going around, and where are buyers coming from. If you think your home will be the best on the market and you can charge ten or twenty thousand more than what's going around, you're wrong. It would help if you did not overestimate the selling price. It causes many problems in judgment throughout the rehab and sale.
Your House Flipping Dream Team
Read on if you have matured past the idea of saving money by doing it yourself and want to scale your house flipping business in the long run. The perfect team you need to succeed in house flipping is a property manager and an interior designer. Here is how this team will make it flipping houses smoother than cream:
Understand The Buyer
Both the interior designer and the property manager understand the buyer. A property manager must have a valid real estate broker's or property manager's license. They know what they want and how much they are willing to spend according to the area in question. They will never over or under-do the renovations.
Work Fast With Timely Reports
The interior designer and property manager know reliable industry professionals and call the right contractors and technicians for renovations. They have long-standing relationships and get good discounts. The property manager can give concise monthly reports on the expenses and what's happening.
Scale the Business
The property manager and interior designer are both executive positions. That means that you can flip three or four houses with one team. You have the solid foundational unit to scale your business. The more teams you make, the more houses you can flip at once, and the more your business can grow.
Help With the Sale
Marketing a property is a property manager's specialty, while an interior designer can stage the house. Staging the house lets the prospective buyer imagine living there. Usually, staged houses are sold in furnished condition. The property dealer can set up open houses to show off the staging.
To conclude, don't rush into the house flipping business alone. Create a great team so your business can grow without any obstacles.
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