House Flipping Mistakes To Avoid

Here are some of the top mistakes to avoid when you are flipping houses:

1. Do Not Overpay For That Investment Property
   
   
   This should be obvious but there are still thousands of people out there that are constantly paying too much for that fixer-upper, bank-owned property. You'd think they'd get a clue. Sometimes it really is a matter of thinking you are getting a good deal because you worked the numbers to be one. This happens because you really, really want to get that first one under your belt. Be careful. You need to make sure that your numbers are correct and realistic! Don't just take someone else's word for it. Take a look at the sold comparables and MAKE SURE THE HOUSES WERE SIMILAR to the one you are buying as an investment. Flipping houses can be very profitable, as long as you make your money when you buy.
   
2. Do Not Be Afraid to Fire A Contractor
   
   
   There are a lot of investors that make this mistake, myself included. A lot of us have trouble firing people because this is our first time running our own business. The trouble comes into play because contractors are usually pretty good at knowing how to pull your heart strings. They will give you their sob story or complain about problems as if they were caused by someone else. It's never their fault. Yeah right. Be careful. You need to have an independent contractor agreement that states exactly what is to be done and for how much and when the draws are to be paid. It is also very important to have a reduction in pay for going over schedule. Do not hesitate to let a contractor go if he breaks the agreement. Don't ever go against what you have in the agreement either. Sometimes it is hard to correct somebody, but you are the boss and it is your job. Don't be afraid to do it.
   
3. Taking Too Long to Move a Flip House
   
   
   If you have an investment property that you are going to rehab and resale, you have to do it as fast as possible. Don't let delays and problems slow you down and cause you to lose money. Holding costs can eat you alive in the house flipping business. We've run into problems where a contractor got way behind and we took our time getting materials and moving things along. Before we knew it, we'd owned the house almost a complete year. I think the interest alone was about $10,000. Ouch! Don't let your flip houses sit vacant. Remember this could also cause problems with vagrants and vandals. Insurance companies typically have a problem with vacant houses as well. Your policy may not pay if something happens. Be sure to check that.
   

I hope this list of mistakes to avoid helps you to avoid losing money when flipping houses. An incredible resource to learn how to flip houses is FlippingJunkie.com House Flipping Blog. There is a lot there that will help you to get started in the business of buying and selling houses for a profit.