House Flipping risks to be aware of for new investors

[Jose Bernard]

My latest house is flip is currently under contract and closing in 2 weeks. House flipping is not a core strategy in my business as I only do 2 to 3 house flips a year and focus more on buy and holds. House flipping offers several advantages. Firstly, it allows investors to make quick profits, providing a lucrative opportunity. Additionally, house flipping grants individuals control over the entire process, enabling them to tailor renovations to meet buyer needs, and it offers networking opportunities within the real estate industry. However, it is crucial to be aware of the risks involved. Unforeseen expenses can reduce profits significantly, necessitating thorough property inspections before purchase. Despite its potential for profit, novice flippers must avoid common mistakes, such as underestimating costs, not having a contingency budget in place, not planning for potential market shifts, not having different exit strategies. and not accounting for holding cost and capital gain taxes when analyzing a deal. If you have never done a house flip, it is important to consider all these factors when considering investing in one.

[Scott E.]

Nice to meet you Chat GPT