Property flipping can be exciting and very profitable – but it is also easy for newbies to make strategic mistakes that undermine the profits they had anticipated so eagerly. How can you avoid the most obvious blunders?

1)      Overdoing The Project = Over-Spending on Market Non-Essentials

You don’t need to replace and upgrade the kitchen cabinets if painting them is all that is needed to satisfy this particular market. You may not be able to live with some of the cosmetic flaws you see in the house and lawn – but your buyer may prefer to ignore them and save on the selling price. This won’t be your house, so fix it for the typical buyer shopping this local market, not for yourself.

2)      Underdoing The Project = Skipping Market Selling Essentials

All that said, do be aware of what attracts buyers and moves houses. An appealing front yard may be the ticket to quick offers; or maybe it is mini-blinds in every window. Don’t quit in exhaustion after you’ve done extensive repairs but haven’t yet done the selling points. Know your market and don’t skip something you see as superfluous if the local home shoppers take it more seriously.

3)      Pricing Too High

New investors sometimes over-estimate how great the property is in the eyes of the world; or how much they feel they deserve given the sweat equity they’ve invested; or what they need to cover costs and make a profit. The market doesn’t care. Learn to see the property through the eyes of a real buyer who wants a great price on something nice, but has no interest in paying for the Taj Mahal.

4)      Not Adjusting the Price; Not Adjusting Soon Enough

If the offers aren’t coming, or aren’t what you wanted, know that waiting for that buyer who will meet your price is rarely the right strategy, and it’s the opposite of what flipping is all about. You may not be happy about reducing the price because you counted on more profits; or you need to cover unexpected costs; or you just think it’s “worth it”. But flipping is about selling. Selling gets you out from under the carrying costs of the property and frees up the cash for the next project. Maybe this project wasn’t everything you hoped, but keep moving forward to better things and put this one behind you.

What’s the answer to avoiding costly newbie pitfalls?Don’t fall in love with your project property – it won’t be yours when all is done. Do have fun with it, and then move on.  Dream big – but realistically!