Ever since reality TV shows exploded in the mid-90s, we have had to keep reminding ourselves the same thing – even though it says “reality”, it is not always real. Google for a few minutes and you will find a long list of real estate reality shows, in particular, house flipping shows. The viewer with the experience in the business can probably pick out the unrealistic parts right away and even the average viewer knows that the shows are meant for entertainment and that they should not be used as a basis for serious decisions. As this Business Insider article puts it – house flipping isn’t all it’s cracked out to be on TV.
Many shows portray flipping as a profitable business that can easily be done in your spare time. In reality, you can make money fixing and flipping houses, but it takes a lot of hard work and a lot of flipping to make some serious money. It is also very easy to lose a lot of money if you don’t know the basics of the business.
How long does it take to flip a house?
On the surface, it would seem that you could fix and flip a house in 3 months – buy the property, fix it, list the house and sell it. However, you should know that it could take you twice as long to finish the job. As an experienced flipper, Mark Ferguson notes in this article, that the biggest challenge is finding the right contractors. Once you find them, you have to get them scheduled for the job, wait for the repairs to be completed and make sure that all the repairs are done correctly. Only after that, you can list the home and sell it as soon as possible.
What should you avoid if you decide to start flipping?
Many first-time flippers try to save money by doing the fixing themselves, because they do not realize how long it takes to make repairs. The thing is, it could take months to fix the property and the extra time can eat up the money you thought you saved by doing the work yourself. To make the matter even worse, the work probably won’t be as good as if a professional did it. So if you decide to start flipping, only do the repairs if you know what you are doing and if you have the time to complete them.
Is all the hassle worth it?
After looking at all the risks, costs and everything that has to be accounted for, flipping may seem a little bit intimidating. Just like anything in life, it takes time to learn exactly what are you doing and feel comfortable. The success will probably not come from making a huge profit in one or two flips a year, but from consistently making modest sums for multiple houses.
Flipping a property is not easy; it takes time to find a property, money to fix it up and market knowledge to sell it. If you decide to get into the business, and you need help with the transfer of legal property or the granting of an encumbrance, experts from Think Conveyancing can help you out. Becoming a successful fix and flipper will not happen overnight, however, if you can master fixing and flipping it could potentially make you a great deal of money and it could be a lot fun also.