The Basics You Need to Know Before You Start Flipping Houses, From General Contractor Pavel Rombakh
Before you begin flipping houses, there are a few things general contractor Pavel Rombakh wants you to know to make sure you know so you are prepared and can make the experience profitable. As most people know, flipping houses is not something you can just jump into; it is important to have a strategy and a timeline in place before houses are purchased and walls torn down. Here are five things Pavel Rombakh said people should know before their first house flip.
It’s always good to start with the basics, Pavel Rombakh said. House Flipping, in essence, is purchasing houses and then quickly re-selling them for a profit. Usually a house flip is done in under a year and improvements are made to the interior and exterior of the house to increase its value. In some cases, no renovations are done to the house but because of the housing market, the house is able to be sold in the same condition for a profit within that one year.
1. What are the risks to house flipping?
As a general contractor, Pavel Rombakh said he has seen troubles with house flipping gone wrong. Of course, the biggest risk of house flipping is not making a profit on the house or, even worse, losing money on it. This can happen with fluctuations in the housing market, which is fairly unpredictable, Pavel Rombakh said. However, it can also be caused by paying too much for renovations that do not increase the value of the house greatly enough to make a difference in profitability.
2. Who can I ask for advice about flipping houses?
Pavel Rombakh said he always suggests people seek advice and counsel from professionals when they are flipping houses. A general contractor is always a good person to speak with, because they have knowledge of how much particular repairs might cost and what a house will need. Additionally, Pavel Rombakh recommends working with a trusted real estate agent in your area. A real estate agent can provide information on good neighborhoods to purchase homes and the state of the housing market. “Don’t be afraid to ask for help and advice,” Pavel Rombakh said. “It always helps to get the opinions of professionals who have intimate knowledge of house flipping.”
3. Are there houses I should avoid purchasing when looking to flip a house?
If a house seems “too good to be true,” it usually is, said Pavel Rombakh. Be wary of amazing bargains and get a second opinion to make sure there aren’t hidden costs or issues with the house that you are missing. It is fine to purchase houses that have had additions over time, but have a trusted inspector take a look at these to make sure everything was done properly, or you could have a giant project on your hands.
4. What improvements are the most important to make when flipping a house?
While a house may never be fully “finished,” some things add more value and are more crucial than others, Pavel Rombakh said. Replacing all the door handles, for example, is a lot less valuable than making structural improvements and improving the outside of the house. Kitchen and bathroom upgrades generally provide the best return on investment.
5. How can I make sure the house I am flipping will stand out to prospective buyers?
“It’s always a good idea to choose a house that has something unique about it when purchasing a house to flip,” Pavel Rombakh advised. For example, a house on the waterfront or with a view of the water or mountains, a flat yard, a secluded home or a house located higher on a hill than other houses in the neighborhood will all catch the eye of prospective buyers. Choosing a house with a unique quality will help it sell more quickly and can bring in a higher profit, Pavel Rombakh said.