AmericanForeclosures.com

January 9, 2009

Filed under: Uncategorized — americanforeclosures @ 8:21 pm

Things to look out for when fixing up homes and pre-foreclosures.

Rehabbing and Flipping Houses – Foreclosures, Preforeclosures – 7 Mistakes to AvoidThe following are seven mistakes that often cost flippers their profits. Any one of these mistakes could cost you dearly.

#1. Not doing the numbers carefully before putting your offer in can wreck havoc with your profit potential. You have to determine what the house will be worth after your repairs (known as the ARV – after repair value). You want to have a very good idea of what your projected cost of repairs will be including both materials and labor. And you want to project your soft costs (ex. Financing costs, carrying costs, and marketing costs) as accurately as possible.

#2. Not having an inspection before you purchase could be a big mistake. You want to know if there is a foundation problem you didn’t see or if you are going to have to tear up the floors to replace floor joists. Something like that can add thousands to your cost and are absolutely necessary to fix.

#3. Not getting written estimates including exactly what it covers from your contractor or subcontractor can make for a lot of misunderstandings and cost you hadn’t counted on. You want to clearly understand what work the quote covers and whether it includes materials or not.

#4. Not firing a contractor you are unhappy with will generally be a costly mistake. If they are not showing up when they are supposed to I would give them a warning and if they continue to show up late or put you off, fire them promptly. Every day you hold that house cost you money. If you are not happy with the quality of their work, tell them the quality is not acceptable and ask them to redo it. If they don’t redo it to your satisfaction, fire them. Their performance will only get worse.

#5. Using your taste in paint colors instead of staying with updated neutrals that will appeal to more people. This is true for your choice of outside colors as well. You want to appeal to as many people as possible to sell as quickly as possible.

#6. Don’t overbuild the house for the neighborhood. Many people do this by adding on to the original structure or by using materials that are too expensive for the price range of the house.

#7. Neglecting the curb appeal will cost you plenty. Many people will not even go in a house that does not appeal to them from the outside. Get it looking nice and keep it looking that way.

Linda Duclos is a successful real estate investor and the author of a new e-book Make Money Flipping Houses – A Complete Guide. Her e-book has over 60 pages of advice to make flipping in today’s market a successful enterprise. Please visit
http://www.flippinghouses4money.com for more information.

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