Flipping homes has skyrocketed in popularity since the arrival of “fixer upper” genre shows on TV like Flip or Flop. But there is so much more to flipping houses than what you see on reality TV.
A barrage of bureaucratic details and design setbacks calculate the time and energy spent on house flipping. These headaches and arguments rarely make it into a flashy 30-minute television show.
Nonetheless, flipping houses can be a profitable business. Go on with the right attitude, ask experts for advice, but don’t expect overnight success.
Here are some of the situations that makes these shows a bit inaccurate, and why they’re more difficult than it appears.
Codes, Zones, Bureaucracy
Understanding the bureaucracy of the city where you plan to flip is critical.
You must obtain a building permit anytime you complete a major renovation of a house, such as removing walls,building additions, refitting plumbing, reconstructing sewage. When you apply and pay for your building permit, that triggers the inspection process. Each state, county and city is going to have its own inspection processes, building permits, and contractor licensing. These factors will influence how you go about your renovation process. Educate yourself on these matters before you even start looking at houses.
You’ll need to make sure the work is inspected. If you fail to do so, inspectors can require you to break down completed work in order to check the foundation. Sometimes these nightmares emphasizing structural damage are featured on flipping shows; but the boring bureaucratic process – skip!
You Can’t Do Every Project On Your Own
Most municipalities require a licensed plumber or electrician to handle the projects that you may be inspired to tackle from home renovation shows. For owner-occupied housing there are exceptions, but if you don’t intend to live in the house, you are required to hire a license contractor. So say goodbye to the glory of completing your own DIY feats.
You’ve Got to Know Your Contractor
If you don’t know your contractor, get to know them as best as you can before hiring them out. Check them out thoroughly before hiring and draft a detailed contract. What’s their experience? Did you verify if they’re bonded and licensed? Did you speak with their references?
Because finding another contractor halfway through a project will consume time and money, you want to build up a healthy working relationship. You want to get to know each other and your plans for the project. Ensure the contractor sticks to the estimate so stick to your budget through the contract.
No, It Doesn’t Happen That Fast
Why is it that house flipping on TV seems to take as long at the show itself – “you can flip a house in less than an hour!”
The more work you plan to do on your own to save money, the longer the process. Some projects are slowed by the time for building permits and inspections, which is another important reason to know those rules in your area. Your house flip cannot solve your financial issues in a few days, like it does on TV. Hands-on work can take one to three months and shouldn’t be rushed.
Also, realize that there is a natural delay on selling a home. Even if it’s a quick sell, between offer and closing the house will still be on your hands for about 30 to 45 days. As mentioned earlier, do research beforehand about the area as to which neighborhoods sell quickly and what rehabs are attractive to buyers.
How can you speed up the process of house flipping? Get financing in place before you begin the house search. You’ll feel a little bit like a television star with some financial backing.
The timeline of the flip and ROI on house flipping television shows are unrealistic, but they are still helpful for design ideas! Contact Center Street Lending about financing the purchase and rehab costs on your upcoming flip.