Flipping House: Make The Best Of Your First Experience

By: Deon Melchior


How to make a house flipping experience a good experience? Let’s imagine a situation and see what the risks are.

Flipping a house does not sound like too hard work. At least, this is how it looks on TV. Let’s say that a man, inspired by the television shows, decides to launch himself into a similar business. He is certain that a lot of money is to be made from this.

Such television shows that can inspire people in flipping a house include a show named Property Ladder where they present first time home flippers. The show host, Kirsten Kemp, helps the inexperienced flipper to fix up an old house and sell it for a nice profit.

For the man that watched this show many times, a conclusion is very clear: people that are doing that are not exactly rocket engineers, so he thinks about doing the same thing. First, he should put down a 10% payment on a home that needs repairs and start immediately.

But the man we are talking about first thinks a little about making a list of the repairs needed in the house. He also tries to find out if for these repairs he needs the help of a contractor. This operation takes two weeks.

The man goes on and, after seeing several offers, he decides for a contractor that agrees to do the major repairs like changing the paint, the carpet and the appliances and to transform an open area into a new bedroom for $11,000. But two weeks fly by as the contractor lets the man know that he must finish some other projects. As a month means only an expense of $800, the man does not worry too much about the delay.

When the contractor comes to work, everything starts well. A lot of junk is taken out of the house and taken by a big yellow dumpster. This phase takes just two days.

But other problems appear: the contracted asks again for a delay of two weeks as his employees quit and other contracts were underway.

For about 8 months, everything goes up and down, until the contract is broken and the man decides to find someone else for the job.

Remember: he already paid for 9 months, plus the 10% given in the beginning, with additional construction costs.

After the repair job is done, the man goes find an agent so he can sell the house. He asks for a price, but after two weeks with no one showing up, he decides to lower it a little. Big surprise, when he wants to raise the price again, someone bought the house. In the end, he made a little money, but as too much as he thought he would.

Let’s list some mistakes the man did on his first flip.

1. It is not the best idea to put 10% down. It is better to use some private money or even finance the house at 100%, so you can use it for the repair job.

2. To have a plan beforehand is always a plus. The men lost time thinking about what to do, instead of using that time for making the repairs.

3. More care when signing a contract would have did him good. He should have asked for penalties in case of delays and he should have considered more offers.

4. He relied too much on that contractor. After the first signs that the contractor was not the right person for the job, he should have give up on him. Again, a good contract would have spared him of such problems.

5. Instead of trying to sell the house through an agency, the man should have tried to sell the house himself, right after the repair was complete.

6. The selling price must be found out before trying to sell the house. To know the market is a good investment when you want to flip a house. The man changed the price too quickly and that brought him a smaller profit,

Try to avoid these mistake and your first flipping house experience will be better.


Deon Melchior is the Editor and Publisher of Article Click. For more FREE articles for your ezine and websites visit - www.articleclick.com