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Preparations to Make Before Flipping Your First Home

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Over the last decade, house flipping has become an increasingly popular way to generate income – and frankly, it’s not hard to see why. Making a handsome profit in exchange for a comparatively small initial investment holds a certain appeal to people looking to generate a lot of income in a short span of time. However, while some house flippers are able to make consistently healthy profits, others frequently encounter costly issues. If you’ll soon be flipping your first home, taking the following tips to heart can help you avoid a lot of the aforementioned issues.

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Have the Property Thoroughly Inspected

It’s no secret that many homes that get flipped have outstanding problems. After all, there’s a reason they sport such comparatively low price tags. However, even if the seller is upfront about any problems with the property, it’s entirely possible that there are issues this person simply isn’t aware of. With this in mind, take care to have any property you’re thinking about investing in thoroughly inspected before proceeding to finalize the purchase.

If new problems are discovered while renovations are underway, you may wind up spending a lot more money than you’d originally intended, particularly if these issues pertain to plumbing, electricity or general structure. Having a property inspected by relevant professionals in advance of purchasing can provide you with a solid idea of what to expect renovation-wise and enable you to budget accordingly. Furthermore, spending a little bit of money on inspections stands to save you a fortune in the long run, as the results of these inspections may ultimately prevent you from making unwise investments.

Research Property Values in the Area

If you’re not going to see a sizable return on your initial investment, there isn’t much point in flipping houses. While house-flipping can be a great way to generate large amounts of income within relatively short timeframes, renovating these homes can cost a considerable sum. So, unless you’re fairly certain you’re going to recoup your investment several times over, a property probably isn’t worth the time, resources and manpower that flipping it will entail.

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When perusing potential flips, take care to research property values in the area. If the amount for which a freshly-flipped house can realistically be expected to sell is barely more than what it’s currently selling for, you’d do well to direct your attention to other properties. This step is particularly crucial for everyone asking themselves, “How much can you make flipping houses?”

Set Aside Funds for Unforeseen Emergencies 

If you’ve ever watched a house-flipping show on television, you’re likely aware that unforeseen emergencies pop up with relative regularity. In some cases, this is due to properties being in worse condition than initially believed. Other times, problems arise as a result of the overall scale of renovations.

So, even if you have no reason to believe that problems will occur throughout the flipping process, make sure to set aside funds for emergencies. If nothing goes wrong, fantastic – you’ll have some extra money on hand. Conversely, if problems do come about, you won’t have to fret over not having sufficient resources to address them.

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Stick with Contractors You Trust

Even if you’re a seasoned handyman, plumber, electrician or carpenter, flipping a house isn’t a one-person job. In order to properly renovate a home in an expedient manner, you’ll need to enlist the aid of seasoned contractors. Of course, not every contractor you work with is going to be a good match, which is why it’s important to maintain contact with the ones with whom you enjoy working the most. Additionally, to reduce your chances of giving your business to the wrong contractors, take care to consult various consumer feedback sites and apps before giving someone your business.

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Many people have built lucrative careers out of house flipping. Even if you’re not interested in turning house flipping into your full-time occupation, it can be a great way to generate additional income and facilitate financial security. Of course, this isn’t to say that every foray into house flipping is successful. In fact, if you jump into your first flip without doing your homework, you stand to lose quite a bit of time and money. So, if you’ve been thinking about trying your hand at flipping homes, make sure to tend to the preparations discussed above.

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