Flipping: Remodeling for Resale

 If you think like a successful real estate investor and consider flipping or rehabbing as a longer-term investment, you’re more likely to succeed.

There are dozens of ways to botch a remodeling job done for resale. At the top of the list are:

• Not doing your homework. There are so many houses on the market for sale today, the competition for buyers is fierce. Check out the competition before you start knocking out walls. The easiest way to do that is to visit open houses in the same price range.
• Going overboard. You want your house to stand out but not like a sore thumb. Make yours a little better than the competition but maintain consistency with the neighborhood.
• Ignoring the yard. Some rehabbers spend all their time on the interior and forget about the exterior. The lawn needs to be in the best possible shape.
• Cutting corners. There’s a big difference between doing things as inexpensively as possible and turning a blind eye to major problems to save a buck. Don’t just clean and paint when something should be repaired or replaced.
• Hiring unlicensed contractors. Problems with the structural integrity of the house or its major systems — heating and cooling, plumbing, and electricity — need to be repaired by licensed, insured professionals.
• Trying to do it all yourself. If you haven’t done some of the trickier home improvement jobs that you have lined up for your house — such as electrical or plumbing work — now is probably not the time to attempt it. You’ll get frustrated and perhaps even injured. Hire a professional and ensure that you allocate that cost in your repair budget.
• Underestimating the time frame. You should probably pad the time allotment for completing the job — especially if you can’t pay an extra month or two on the mortgage. If you’re holding two mortgages, establishing a realistic time line is critical.