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Rehab 101

If you're new to flipping houses and it seems like a good idea, there are a few important factors to consider before diving in. Firstly, it's crucial to master the basics of construction. While many try to optimize their profit by doing the work themselves, there are many precautions you should take before proceeding in that way.

Understanding the ins and outs of renovations will help you make informed decisions and avoid costly mistakes. According to an analysis by RealtyTrac, 12% of flips sold at break-even or at a loss before all expenses. In 28% of flips, the gross profit was less than 20% of the purchase price. However, it is important to note that these statistics are not specific to first-time house flippers.

When starting out, it's advisable not to take on a huge flip right away. Starting small allows you to gain experience, learn from your successes and failures, and gradually scale up your projects.

Flipping houses often requires a team effort. Be prepared to hire help when needed, whether it's contractors for major renovations or professionals such as real estate agents or lawyers for guidance throughout the process.

One important tip is to avoid living in the property while flipping it. This can complicate matters and slow down progress. It's best to have a separate living arrangement during the renovation period. While live in flipping offers tax breaks and financial advantages, your life can start to bog down under the weight of projects. The constant dust, dirt and noise can be overbearing for most homeowners. Instead, give yourself space away from the work zone to clear your head and refresh.

Keep in mind that while the internet can be a valuable resource for research, it is also full of misinformation. Double-check any information you find online with trusted sources or seek advice from experienced flippers or professionals in the industry. Be mindful that everyone has their own process. It isn't always as clear cut as "right versus wrong" when doing construction. Many trades workers come from families who have devoted years into learning specific skills and can be a valuable source if information. Unfortunately, the opposite can also be true. In an age where anyone with a computer can be an expert, more often than not the person giving you advice has little to no actual firsthand experience on the matter.

By considering these factors and being well-prepared, you can increase your chances of success when venturing into the world of flipping houses.

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