The idea of flipping a Nocatee house is simple: purchase a run-down house, implement a bit of remodeling, and then sell it at a much bigger cost. There is no doubt that house flipping has made large returns to many investors across the country. But flipping houses also comes with a high amount of risk, and a flipping project can quickly grow into a financial nightmare.
House flipper Carol Sankar of Charlotte, NC describes one project in which the home was burglarized multiple times during the remodel. One day, when the project was about to finish, she showed up at the home to find that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator were also gone. Because the property was in a locality with few security measures and a low police presence, there was little Sankar could do to regain her stolen materials and appliances.
In another incident, Daniil Kleyman in Richmond, VA, purchased a project house for what he declared was an easy job. An experienced investor, he worked on the preliminary market assessment on the property and thought he would be able to remodel and sell it for five times his initial cost. Unfortunately, Kleyman created a chain reaction of bad decisions that resulted in him losing money on the flip.
Not only did the first contractor he hired walk away from the job with his money and without fulfilling the work he was hired 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 thought. And then the property was burglarized, stripped to the walls, plumbing broken and flooding the basement. After rebuilding the damage and replacing the stolen appliances and fixtures, Kleyman was forced to sell the house at a loss to a less-than-happy customer.
Kleyman’s story, specifically, is one that illustrates many of the headaches that come with flipping houses for resale. This investor would have succeeded from accurate market data, proven construction professionals, and the expertise of property management professionals from the beginning. Understanding how this knowledge might have changed his decisions had he invested in the property as a rental home instead.
By first consulting an industry expert like Real Property Management Sunstate, he would have acquired a detailed market assessment prior to purchasing the property. He would have known the market value of the property from the onset, maybe altering some of the judgments he formed later on.
RPM Sunstate would have also given Kleyman the names of trusted remodeling and repair vendors in his area and would have worked with those vendors regularly, diminishing the odds that the contractor he hired would seize his cash and escape. Lastly, the team would have accurately priced and marketed his new property for him, detecting quality tenants inclined to spend a competitive rental rate every month for as long as Kleyman wanted to keep the home.
For all these clear benefits, there are still investors who presume that partnering with a property management company is too pricey. Nevertheless, as this case shows, Real Property Management Sunstate extends a mix of valuable services and business connections that can help investors make far more money long-term than flipping houses might bring. Indeed, 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 assistance of authorities assigned 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 877-373-8404 today.
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