The thought behind flipping a Tamarac house is simple: purchase a run-down house, maybe do a bit of remodeling, and then soon after sell it at a much more expensive price. Without any question, house flipping has surely helped give large returns to many investors throughout the country. But flipping houses also bring a high degree of risk, and a flipping project can fast become a financial nightmare.
House flipper Carol Sankar of Charlotte, NC details the story of one project in which the home was burglarized multiple times during the remodel. Towards the end of completion for the said project, she visited the house only to discover that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator were also gone. Since the property was in an area with few security measures and a low police presence, there was little Sankar could do to regain her stolen materials and appliances.
Another instance happened with Daniil Kleyman in Richmond, VA, where he purchased a project house for what he initially believed was a great arrangement. An experienced investor, he did a preliminary market assessment on the property and anticipated to be able to remodel and sell it for five times his cost. Regrettably, Kleyman committed a number of bad decisions that resulted in him losing money on the flip.
Not only did the first contractor he hired quit the job and took his money without finishing the work he was contracted to do, but Kleyman had also used the wrong comparable properties when estimating his post-remodel sales price. He was obliged to list the property for far less than he had intended. And then the property was burglarized, stripped to the walls, plumbing broken and flooding the basement. After refurbishing the damages and replacing the stolen appliances and fixtures, Kleyman was ultimately able to sell the house at a loss to a less-than-enthusiastic buyer.
Kleyman’s story, in particular, is one that reveals the numerous problems that go together with flipping houses for resale. This investor would have significantly benefitted from accurate market data, proven construction professionals, and the expertise of property management professionals from the start. Contemplate how this situation would have ended differently had he invested in the property as a rental home instead.
By first consulting an industry expert like Real Property Management Premier, he would have received a detailed market assessment prior to purchasing the property. He would have recognized the market value of the property from the start, possibly even altering some of the choices he made later on.
RPM Premier would have also given Kleyman the names of trusted remodeling and repair vendors in his location and would have rendered time to observe those vendors every so often, significantly lessening the likelihood that the contractor he hired would take his money and run. Finally, the team would have accurately priced and marketed his new property for him, finding quality tenants ready to spend for a competitive rental rate every month for as long as Kleyman wanted to keep the home.
Even with these clear benefits, some investors still perceive working with a property management company as too expensive. However, as this example proves, Real Property Management Premier offers a range of valuable services and industry contacts that can help investors make far more money long-term than flipping houses might bring. We handle all of the operational demands of owning rental properties, leaving you free to work on other aspects of your real estate business.
With Real Property Management on your investment team, you’ll have the supervision of experts dedicated to making every one of your properties one of the best long-term investments you can make. For more information, contact us online or call us at 954-362-5235 today.
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