Property flipping has become the latest real estate investment trend of the 2000s. Real estate investment aspirants and moguls are rushing into the arena, hoping to make staggering profits; but only a handful of them are striking the best deals.
Reason?
The basics of property flipping are being overlooked!
While it is true that property flipping is no rocket science and it is one of the smartest and safest strategies for both first time and experienced investors, there are certain basics, which could lead to major errors, if ignored.
If you’re a real estate investment aspirant, hoping for a successful start to transform your side-business into a full-blown career, take a look at these 4 beginner mistakes investors tend to make and how you can avoid them.
Mistake # 1 – Insufficient Knowledge
Being able to pick the right property in the right place at the right time and at the right price is a skill that’s developed only with sufficient knowledge of the real estate market. Venturing into property flipping without any knowledge about the investment arena is equivalent to crossing a busy street with a blindfold.
You need to be aware about current trends in the market, real estate news forecasts, applicable tax laws, funding policies, booming markets and the general mindset of the average buyer before you strike a deal.
Mistake # 2 – Insufficient Funds
Your first real estate investment needs to be backed by sufficient funds to acquire the property. Flipping is the second step; acquiring the property is the first. Without this first step, you can make no head start in the industry and without sufficient funds, you cannot take the first step.
Seek advice from a financial consultant and plan a foolproof financial strategy to back your investment. Consider all the purchase costs, renovation costs, taxes and professional fees you will have to incur and adjudge whether you will be able to strike gold after flipping the property.
Mistake # 3 – Insufficient Time
Property flipping is time consuming. If you already have too much on your plate and are taking up real estate investment simultaneously, you are inviting trouble. Clear a few tasks off your schedule or make a thorough time plan in order to be able to devote sufficient time to your real estate investment endeavors.
You will need time to look out for properties, shortlist your preferences, acquire your preferred property, renovate it and sell it. The more time you have, the more profit you can expect to make.
Mistake # 4 – Insufficient Patience
Ever seen a successful real estate investor at work? The professionals take their time and wait for the right property and / or wait for the right time to flip it. Novices often tend to rush into the deal by being lured with the prospect of profit. Luck may favor you once, but not every time. Take the time to go over all your options before you’re 100% sure of your decision to buy and flip the preferred property.
As a real estate investor, you are in control. The bottom line is that only YOU can make the right decisions. Therefore, investment gurus like Jeff Adams recommend you ensure that you have enough knowledge, funds, time and patience to invest into your investment.
