What critical real estate investment lessons can be picked up from those flipping houses in Las Vegas?
The Las Vegas housing market continues to be as diverse as the contrast between the desert and the strip. It’s a market known for both its abandoned foreclosures as well as world class penthouses and extreme extravagance. This makes it an interesting market to flip homes in, and one which has been said to see changes develop as fast as a round of Texas Hold ‘Em. Yet, at the same time, fixing and flipping houses there is just the same as anywhere else in the world when it comes down to operations.
Those that have been tuning in to episodes of the reality TV show Flipping Vegas will have witnessed some of the following challenges and blunders in action. These factors remain true, no matter where you are flipping houses, so keep an eye on the following:
1. Know When to Do it Yourself
Investors thinking big and trying to scale their real estate businesses are frequently reminded that they should only be focusing on the most valuable tasks at hand. While this is certainly true 99% of the time, there are most likely going to be days when it pays more to step in, roll up your sleeves and get your hands dirty. For example; if you are averaging an income that is equivalent to $300 an hour, saving $700 on labor costs that you can do relatively easily will be worth it. Some situations will call for your immediate action. Just know when it is worth it and when it is not.
2. There Are Always Bigger Issues Lurking Under the Surface
When you start pulling things apart or recognize that there is an issue like water damage, leaks, mold, faulty plumbing or electrical wiring; there is usually a larger problem to focus on. This can quickly put you over budget, mean ripping out major chunks of the house, and if you procrastinated in checking it out thoroughly, even tearing out your remodel work and starting again. Always investigate and get a second opinion upfront. Have a reserve, expect to go over budget and tackle these monsters first.
3. Dollars in Design Work Doesn’t Always Mean More Profit
One of the best parts of fixing up and flipping houses is being able to flex your creativity and create beautiful properties. Unfortunately, this doesn’t always mean you’ll get a great return on your most stunning and fashionable work. What you do to make the house pretty, that goes beyond simply making repairs, may look great, but it often doesn’t deliver a penny more on an appraisal. Watch this carefully or you’ll be losing money. If you are involved in real estate investing, you can’t keep adding luxuries for the sake of doing so. It will on;y hurt your bottom line.
4. Be Specific to a Fault
Never assume anything when you are flipping houses. Specifically, do not assume a contractor always knows what you are looking for. Be detailed to a fault in your instructions. If you leave out specifics, you may end up with something you didn’t want. Often times, this means something else that costs more money. It’s normally worth the couple extra moments of listing out detailed specs.
5. Timing Your Remodel is Everything
There is more to successfully and profitably flipping houses than just choosing flooring and paint colors. You need to know how to coordinate your contractors so that they don’t get in their own way. Proper scheduling will allow them to work as swiftly and fluidly around each other as possible. If you don’t have the expertise or time for this, hire a trusted general contractor to manage the project for you.