The ideal scenario behind flipping a Pocatello house is as easy as it sounds: purchase a run-down house, do a bit of remodeling, and soon later market it for a much higher price. The reality is that house flipping has yielded large returns to many investors throughout the country. Bear in mind, though, flipping houses likewise carry a higher level of risk, and a flipping project can immediately become a financial nightmare.
House flipper Carol Sankar of Charlotte, NC details one project in which the home was burglarized multiple times during the remodel. Towards the day of completion for the said project, she arrived at the home only to find that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator were also gone. Since the property was in a location with few security measures and a low police presence, there was little Sankar could do to regain her stolen materials and appliances.
In one more case, Daniil Kleyman in Richmond, VA, purchased a project house for what he believed to be a win-win deal. An experienced investor, he conducted a preliminary market assessment on the property and anticipated to be able to remodel and sell it for five times his cost. Unfortunately, Kleyman committed a run of multiple errors that ended in him losing money on the flip.
Not only did the first contractor he hired turn his back on 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 wanted. And then the property was burglarized, stripped to the walls, plumbing broken and flooding the basement. After fixing the damage and replacing the stolen appliances and fixtures, Kleyman was finally able to sell the house at a loss to a less-than-enthusiastic buyer.
Kleyman’s story is one that clearly shows the many complications 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 beginning. Consider how this situation would have been had he invested in the property as a rental home instead.
By initially consulting an industry expert like Real Property Management Pocatello, he could have been given a detailed market assessment prior to purchasing the property. He would have recognized the market value of the property from the start, possibly even altering some of the decisions he made later on.
RPM Pocatello would have also extended Kleyman with the names of trusted remodeling and repair vendors in his location and would have made rounds with those vendors regularly, greatly minimizing 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, searching for quality tenants that are willing 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 are mistakenly given the impression that working with a property management company is a burden and costly. However, as this example validates, Real Property Management Pocatello 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 who are eager to turn each and 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 208-234-1000 today.
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