What not to upgrade during a fix and flip?
Flipping properties is a concept used to describe the process of buying and reselling properties quickly and for a profit. This simple concept is mostly used by the short-term sellers to rake in quick profits upon renovating properties. Many realtors often run into problems with finding the right private money lenders to finance flipping properties and with landing the right contractor to fix and repair the property. But, once these realtors find the right contractors for the undertaking, the rest is as easy as ABC.
Flipping properties is a lucrative venture that doesn’t consume a lot of time for the stakeholders. Many investors in this particular line of work actually have a day job and they only work on the repairs on the properties on a part-time basis.
The most popular type of flipping and fixing financing options are hard money loans. Read on to learn what not to upgrade during a fix and flip.
As a savvy investor, it is imperative you have a clear understanding of all the costs involved in flipping a property. By default, money will be required to purchase the given property, to repair and renovate the assets. Additionally, you’ll have to cough up some cash to offset the real estate commissions and to cater to the insurance and property taxes on the particular asset. Many investors often fail to factor in the time required to finish a proper fix and flip process. The time and the costs necessary to carry out a profession re-do of property often vary drastically from one property to the next.
It is prudent to have a long-term strategy when you’re flipping properties as most of the time, you end up with ballooned repair and renovation costs. As such, it is highly advisable you have a solid flipping financing plan in place to avoid getting in way over your head as time progresses. Check out Wildcatlending.com hard money loans for financing options.
To avoid getting into a sure money-pit with the fix and flip projects, here are some of the mistakes you ought to steer clear away from.
Set realistic goals
Many investors have found themselves in deep financial woes with the fix and flip projects by setting unrealistic goals. Don’t go in with the expectations of transforming a derelict-looking property into the finest property in the entire neighborhood. Keep it simple with the renovations; don’t try to come up with new flooring and finishing plans for your clients. Instead, just strive to get the property to be habitable and functional and you’ll surely recover your investments.
Don’t Over-Do the Landscape
The temptation to spruce up the landscape and have it looking glamorous is always there. But you should avoid going overboard and instead opt for simple but aesthetically appealing retouches with the front lawns and gardening. It makes no financial sense to attempt to install an exorbitantly-priced fountain in a run-down neighborhood.
Avoid Overly Rundown Homes
Many realtors eye properties that have major structural issues. In as much as there’s a huge profit to be made by flipping a one-time rundown property, you risk incurring massive costs to get the homes to the desired shape and form. What’s more, such properties can take a lifetime to sell and your money will be tied into the investment as you look for an ideal buyer.
Avoid Bring and Heavy Colors
A common mistake done by many realtors seeking to fix and flip homes is that of overdoing the colors. It is imperative you, as the realtor, try and keep the colors calm and polite. If possible, try and go with the colors that complement the theme of the neighborhood to avoid any inconveniences moving forward.
Avoid Luxury features
The allure incorporating luxury features on the property you are seeking to flip will always be there. After all, if you fix and install luxury features like chandeliers, Jacuzzis, and the likes of luxury rainfall steam showers, then you’ll get to sell off that property at the best ROIs. But, it is wiser to consult with your prospective buyers first and learn of the exact luxury amenities they are interested before purchasing the same.
Don’t ever attempt to fix and flip properties that have roof issues. As any seasoned flipper will attest, there’s nothing quite as costly as repairing and renovating roofs in a particular property. Fixing derelict roofs is not only remarkably costly but very time-consuming as well.
The average home buyer will most likely not require you to fit their properties with theater rooms. Don’t bother with such unnecessary fixes as they don’t add value to the property but they suck in a lot of cash to undertake.
Avoid Road-side Properties
It is highly recommended you avoid attempting to flip properties located beside busy main roads. Properties adjacent to busy roads are remarkably tough to sell, especially to parents with small kids. Such properties do not attract many buyers who consider them to be both noisy and dangerous for them and for their young ones as well.
Avoid the temptations of choosing expensive fixtures and fittings on the property you’re flipping. Don’t go for the latest taps, tiles and other fixtures as they’ll only lead to a burgeoned repair cost. Instead, strive to find lovely fixtures that rhyme and match with the existing home décor to avoid overspending and to maximize your ROI.
Refinish Don’t Replace
It makes perfect economic sense for you to consider upgrading and refinishing the broken-down cabinets and other fixtures at the property than to replace everything. Go look online with a consummate repair technician for advice and tips on how to refinish the rundown cabinets at lowered prices.
Real Estate Loans
If you’re an investor or a homeowner seeking to fix and flip your spaces, then look no further than at Wildcat lending. Wildcat lending is a trusted and reliable hard money lender issuing quick and tailor-made real estate loans to help you oversee the necessary upgrades to your properties. It only takes a few minutes at most for you to get served by the professional lenders at this reputed hard money lender. Try Wildcat lenders today for a uniquely refreshing real estate financing experience.