1. Steep Learning Curve for First Time House Flippers:
Learning the ropes with fixing and flipping a home is much like that of starting a new career. The learning curve is steep and requires commitment, time, investment, and a desire to learn about real estate, contractors, law, marketing, building codes, taxes, and more.
Basically, this isn’t a strategy for those who want an easy way to deal with an existing home or an easy way to make money from an investment. Unless a person wants to make this strategy part of their real estate investment career and is willing to learn the ropes, the fix and flip strategy isn’t likely for them.
2. Large Investment Needed with Unknown Return:
One of the biggest misconceptions about house flipping is the profit margins, at least for beginners. The truth is the fix and flip strategy requires a large investment and doesn’t guarantee a profit in the end. This is especially true with beginners who haven’t calculated the comprehensive expenses involved from start to finish.
Being able to see results, when flipping homes and more importantly, profit, can take some time and investors must keep in mind that patience is key.
3. The Amount of Time and Effort Needed to Flip a Home:
The fix and flip strategy can work, yet owners must be willing to take the time and expend the effort necessary to make a decent profit. How much effort and time it takes to do this highly depends on the specific variables involved; often for beginners, the entire process takes longer and requires more effort than originally expected.
There are many hindering factors that can derail ideal fix and flip scenarios, such as:
· Legal issues
· Contractor issues
· Real estate market demand
· Inaccurate valuations
· Unexpected repairs
· Building code issues
Flipping homes can definitely be a lucrative and profitable endeavour, but it will take loads of patience, effort and hard work. Make sure that before entering this business, you asses not only the financial side of things, but also your personal skills; as doing so will aid with making this decision more soundly and also efficiently.