Some people want to get into flipping houses because it looks like a fast and profitable way to build an income. It can be. But the biggest mistake that people who get into the business make is they underestimate how much time it’s going to take.
They also underestimate how much it’s going to cost. You have to flip a home quickly if you’re going to make money, but the house doesn’t always cooperate with your timeline.
When you start flipping a house, you may run into defects that are hidden beneath the surface. What looks good on the outside wall might be hiding a myriad of electrical wiring problems behind the drywall.
Hidden problems like that are common in almost every house because people don’t often update things like wiring. It’s expensive to have a home professionally rewired.
A problem like that can add thousands to your budget costs. The same thing can happen if there’s a problem with the plumbing. A slow draining toilet or tub is often dismissed as a possible clog but it’s actually a major plumbing problem such as the pipes in the yard are cracked or full of tree roots.
Then you have to dig up the lawn, replace the pipes and then repair the damage to the lawn. Problems always slow down the renovation schedule as well as add to the cost.
The best way to prepare to be thrown off schedule is to budget more time than you think each step of the renovation will take. This way, you build in a time buffer.
Having to depend on other people in a team to help you get the house ready to go on the market can add to the time and the cost as well. Not everyone shows up when they’re supposed to be on the job.
They might arrive a few hours to a day late or not at all. This can throw you behind if you don’t consider working with others can be a time buster. Plus, you might be given an estimate by someone in the team and then it turns out that it’s more work and material than he anticipated so now he has to tell you it’s going to cost several hundred dollars more.
Weather delays should also be figured into the house flip. If it needs a new roof or you need to put in a new driveway, you can’t do that in the rain or in snow. By budgeting in potential problems and overages, you’ll still be able to get done on time and within your budget.
Give us a call to discuss any of these areas!