You want to flip a house to make money, right? It can be done with a little forethought and planning. Read on to find out the top 3 ways to stay on budget when flipping a house and avoid unnecessary debt.
Stick to your budget when buying the house.
Do not be swayed by emotion or "falling in love" with the property. Remember to do your research beforehand and purchase at the right price when the time comes. Research should include a thorough evaluation of the neighborhood. Are there nearby family-friendly amenities? What about school quality? Are there other properties for sale in the area? Are properties selling quickly or is there a glut of properties on the market in that area?
Don't skip the home inspection.
Some people think because they do not plan to occupy the property, the home inspection isn't really needed. Nothing could be further from the truth. In fact, you need the home inspection precisely because you don't plan to reside there. Owners/occupiers have months or years to discover what needs to be addressed. You don't. You need that property in top condition as soon as possible so you can resell it. Skipping a home inspection could result in a nasty and expensive surprise later on. Issues like faulty wiring or an unstable foundation could turn a bargain buy into a money pit if you discover them after purchase.
Never pay contractors in full up front.
Paying a contractor in full before the promised work is completed is never a good idea. It provides no incentive for the company to finish (or in some cases even start) the job. Additionally, if you need to hire someone else, you would have already blown your entire contracting budget. Since you can't leave a house unfinished and hope to flip it, that means you will start spending more than you bargained for - unnecessary debt.
Remember these three tips the next time you're flipping a house to stay on budget and avoid unnecessary debt!
Contact us for a free copy of our complete contractor agreement to keep you safe.