If you are an inexperienced house flipper, there is plenty that could go wrong for you. According to Asaf Izhak Rubin, every experienced house flipper is aware that flipping houses do not constitute a hobby. It is no different from a real business and you need to treat it accordingly. Essentially, house flippers are those who purchase homes and then renovate and improve them to the point where they are in high demand. Of course, there are plenty of things that can go wrong when you are just starting out and lack experience.
However, this does not mean that you cannot engage in this kind of real estate investing. You can start off on the right foot as long as you are cautious and don’t make the following mistakes that Asaf Izhak Rubin has highlighted:
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Not having enough money
The top mistake that real estate investors make when flipping houses is not having enough money. The problem, as per Asaf Izhak Rubin, is that most people don’t have a clear understanding of how much it would cost to flip a house. You first need to have a clear idea about costs and then ensure that you have the money to go ahead with it. Accurate cost planning and budgeting play a very important role in the success of your project and determining the returns you can make.
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Failing to have a plan
Making a real estate investment without having a plan is downright irresponsible. You need to draft a strategic business plan before you decide to dive in. This can have a number of benefits in the long run. You will have a clear understanding of the risks, rewards, and returns you can make when you have flipped the house and sold it. When you are flipping houses, time is often money, so having a business plan can help you estimate the potential costs and timeline. The longer the project takes, the higher your costs, so having a solid business plan can help you pinpoint them and cut them down.
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Forgetting property insurance
Every real estate expert like Asaf Izhak Rubin will tell you that not buying property insurance before you invest in a property is a rookie mistake. The purpose of this insurance is to reimburse homeowners and can also mitigate the risks associated with house flipping in case there is damage to the property. If you are flipping houses to make a return on your project, you get property insurance against fire, theft, flood, or other risks.
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Choosing the wrong partner
House flipping is no small task and people usually work with partners to assist them with the project. However, your choice of partner is of the utmost importance because house flipping can be quite stressful. Think twice before you agree with anyone, as Asaf Izhak Rubin suggests that you connect with experts and trusted sources who are familiar with the renovation process and are willing to commit. If you work with a respected plumber, contractor, or carpenter and have chosen them after vetting, you are likely to get quality results that can give you a good return on your investment.
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Not understanding the market
Your investment success also depends on how much you understand the market. Doing a market analysis is necessary for understanding the risks and rewards associated with flipping houses. As a matter of fact, experts like Asaf Izhak Rubin will tell you that this can help you decide if it is the best time to fix and flip a house in a specific location. You have to consider the existing housing market trends, like the demand for housing, the kind of renovations home-buyers are seeking, the price they are willing to pay, and so on.
As long as you are careful to steer clear of these mistakes, you will be able to make the most of your house flipping project.