Getting into the house flipping business offers its fair share of rewards but it also does not come without any risks. If you are new to flipping homes, then it can be tempting to taking on multiple projects all at once. While you may feel like you are missing out on a deal on a home, staggering multiple flips will help to ensure that your business has longevity.
Your Capital is not Tied Up
While you may get financing to help purchase the homes that you plan to flip, in order to actually get the financing, you often have to provide capital of your own. Taking on multiple projects all at once ties all your funds up into each house. This makes it difficult to pay for things like repairs and contractors.
You'll Have More Time
Successfully flipping homes relies heavily on having good time management. In the real estate market, your time frame can easily get pushed back by days, weeks or even months. Inclement weather, contractors, and a difficult market can make it difficult to get your home off the ground and sold. Focusing on one home gives you time to adjust your timeline in the event of setbacks.
You'll have Less Stress
If you are a beginner to home flipping, then the process can be both incredibly exciting and stressful. Stress can quickly overwhelm you if things do not go according to plan. One day you may find out that there is water damage in the basement and the cost of repairs will blow through your budget. Taking on multiple flips increases the chances of dealing with one issue or setback after another. Staggering your flips will help to alleviate this stress tremendously.
You'll Be Able to Price it Right
Working on a number of flips all at once pushes you to want to sell the home and move on to your new project. In order to do this, many flippers find themselves pricing their home considerably below market value. This leaves a good amount of money on the table. While you should not price your flip too aggressively, you should make sure that the price is always competitive. Also, the pricing needs to take into consideration cost and time.
Getting involved in flipping homes can be a good business decision. However, it is important to understand the advantages of taking things slow. Don't hesitate to contact us if you have additional questions.