When first researching real estate flipping, you’ll mostly learn about all the great doors that it opens. You’ll get financial freedom, enjoyment, and a rewarding sensation not available in other careers. However, not many online guides tell the truth – flipping real estate in Texas is difficult. Yes, you can benefit from all the great things. First, though, you need to avoid some common mistakes!
Not Enough Funds
Firstly, too many people jump into real estate flipping without considering the implications of their decision. If you borrow to fund the move, you need to consider tax. Interest might be deductible, but not necessarily the whole amount. If you use a HELOC (Home equity line of credit) or mortgage, the interest is the only deductible element. Therefore, this means that taxes, principles, and insurance are not.
Before making an expensive and potentially regrettable decision, sit down with a finance expert and discuss the project. Think about how you’ll fund the purchase, how the interest affects taxes and the other financial implications.
Underestimating Renovations
If you don’t have experience in flipping properties in Texas, or fixing homes, you absolutely need to speak with builders and other professionals. There’s an old saying about making assumptions, and this very much applies to flipping properties. Don’t guess home renovation costs; instead, speak with contractors and get accurate estimates.
Contractors will review the property, talk through potential renovations, and even spot issues that you didn’t see. Therefore, it always pays to get accurate estimations rather than buying a property and being forced to pay more than planned during the renovation stage.
Having No Patience
You’re excited about getting started, and this is understandable. Yet, this doesn’t mean that you should purchase the first property that you find on an online search. One of the worst things you can do is put your money into the wrong home just because you’re eager to get started.
Whenever you buy a new phone or car, you do lots of research, and the same should go for buying a property. Even if you don’t plan on living in Texas, you’re still relying on a future buyer having an interest. It’s better to have an average home in a high-quality area compared to a high-quality home in an unattractive area.
Therefore, we recommend stopping for a moment, taking a deep breath, and starting with some research. Learn what buyers find attractive with properties in 2021, take some notes, and speak with people who currently flip properties. If you need to hold on to the property for a little longer than expected, you can always manage your property in San Antonio with Red Wagon Properties. Companies like Red Wagon can make the transition smoother if it takes time to flip.
Forgetting the Customer
With any business, the customer is the most important stakeholder; if you don’t appeal to their needs, you won’t succeed. Flipping properties is a business, and your customers are the buyers or renters. Consequently, every decision you make should be with the final customer in mind. Think about what buyers want from a property, as well as features inside the home. This means proximity to shops and schools, crime rates, access to public transport, etc.
If you don’t think about the buyer, you aren’t going to appeal to them in the end. It’s like building a new bicycle without considering a comfy seat, good suspension, and other important factors.
Lack of Skills (Unwillingness to Delegate)
Most people flipping a property for the first time fall into the trap of wanting to do everything themselves. If you don’t have the skills, you need to be strong enough to ask for help. This means building relationships with plumbers, electricians, carpenters, builders, and other professionals. The better the relationship, the more this will help as you take on more projects.
Most people flipping a property for the first time fall into the trap of wanting to do everything themselves. If you don’t have the skills, you need to be strong enough to ask for help. This means building relationships with plumbers, electricians, carpenters, builders, and other professionals like a tax professional or an attorney. The better the relationship, the more this will help as you take on more projects.”
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