Posted about 5 years ago

Flipping a House? Don’t Make These 3 Remodeling Mistakes

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When you’re flipping houses, remodeling is part of the deal. The problem is, there are a lot of ins and outs to learn about when you get started. If you’re short on experience, and there’s no one on your team who can mentor you about the finer points of home construction and remodeling, you’re liable to make a few mistakes, and some of them can be costly. To help you out, we’ve put together a top three list of costly mistakes you’ll want to avoid as you start your first project.

Biting Off More Than You Can Chew

This overused adage can mean a lot of things in this context, but first and foremost it applies to trying to remodel too much on a property. There’s definitely a point beyond which more remodeling doesn’t equal more money on the sale. Fixing up a fixer-upper costs capital, and the more you fix, the more you have to reclaim when you sell it. Remember that your property isn’t going to sell at a price above and beyond the value of other properties in the neighborhood, so beginning projects you can’t afford to finish isn’t a good idea. Your best bet is to make a firm, realistic budget, and stick to it, so that you can sell the property for something reasonable.

This phrase can also apply to projects you try to DIY your way through. Keep in mind, if you were a contractor, you would probably be building or remodeling houses for a living, rather than flipping them. That means that the experience and industry knowledge that contractors leverage to do their jobs is something you lack, so you’re liable to make mistakes like failing to take out permits, or failing to identify that load-bearing wall before you knock it down. Know your limitations, and know when to call a professional.

Taking the Lowest Bid

Speaking of professionals, you don’t necessarily want to take the first guy who applies for the job (so to speak). Get multiple bids on the project, and then don’t assume that the lowest bid is your best option. Keep in mind that lower bids are usually built on intentions to use lower quality materials, less-experienced labor, and generally corner-cutting work. Like buying a cheap phone, you often get what you pay for.

Choose a contractor who knows the value of his work, but isn’t going to bleed you dry. Be sure you vet them properly, too, checking references, and ensuring that they are properly licensed and qualified to do the job.

Starting Work Without a Contract

A remodeling project is a significant commitment of time and money, from both parties. This isn’t a simple tub splash you’re throwing up and grouting in the same day. Both you and the contractor deserve a written contract that delineates how and when work will be completed, how much will be paid and when, and what happens if something goes wrong. This is to protect your interests as much as it is to protect them, as it will hold them accountable for things they fail to complete or mistakes they make along the way. It also holds them to a schedule, and gives you the authority to withhold payment if things don’t get done on time. Most importantly, it keeps the contractor from changing the plan and making decisions that you won’t be happy with. So decide on an agreement, and put it in writing.

For more information on how to avoid the dangers and pitfalls of flipping houses, contact the experts at Real Estate Elevated.