The concept that lies in flipping a Cranberry Township house is very simple: purchase a run-down house, maybe accomplish a bit of remodeling, and then market it at a profitable rate. There is no doubt that house flipping has fetched large returns for many investors across the country. But flipping houses also involves a high degree of risk, and a flipping project can easily become a financial nightmare.
House flipper Carol Sankar of Charlotte, NC shares the incident of a project in which the home was burglarized multiple times during the remodel. One day close to the end of the project, she arrived at the house only to learn that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator had also vanished. This is also due to the location of the property where there were few security measures and a low police presence; there was little Sankar could do to regain her stolen materials and appliances.
In another situation, Daniil Kleyman in Richmond, VA, purchased a project house for what he understood to be a win-win deal. An experienced investor, he performed a preliminary market assessment on the property and expected to be able to remodel and sell it for five times his cost. Unfortunately, Kleyman made a few blunders that ended up with him losing money on the flip.
Not only did the first contractor he hired suddenly quit the job with his money and 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 had to list the property for far less than he had initially planned. And then the property was burglarized, stripped to the walls, plumbing broken and flooding the basement. After restoring the destruction and replacing the stolen appliances and fixtures, Kleyman was eventually able to sell the house at a loss to a less-than-enthusiastic buyer.
Kleyman’s story, to be specific, is one that illustrates the many challenges that come 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. Imagine how different this situation would have resulted in had he invested in the property as a rental home instead.
By initially consulting an industry expert such as Real Property Management Three Rivers, he would have gotten a detailed market assessment prior to purchasing the property. He would have understood and recognized the market value of the property from the start, maybe even changing some of the choices he made later on.
RPM Three Rivers would have also given Kleyman the names of trusted remodeling and repair vendors in his area and would have kept a close eye on those vendors on a periodic basis, significantly lowering the possibilities 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 pay a competitive rental rate every month for as long as Kleyman wanted to keep the home.
Regardless of these clear benefits, some investors wrongfully believe that working with a property management company is much too costly. However, as this example clearly shows, Real Property Management Three Rivers offers a range of valuable services and industry contacts that can help investors make far more money long-term than flipping houses might bring. In fact, 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 help 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 724-804-8254 today.
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