The inspiration around flipping a Henrico County house is clear: purchase a run-down house, undertake a small amount of remodeling, and then sell it for a higher fee. There is no question that house flipping has created large returns to many investors all over the country. But flipping houses also brings a lofty measure of risk, and a flipping project can quickly change into a financial nightmare.
House flipper Carol Sankar of Charlotte, NC shares of a project wherein the home was burglarized multiple times during the remodel. On an ordinary day nearing the end of the project, she entered the home to find that the kitchen cabinets had been stolen right off the walls. A dishwasher and a refrigerator also were gone. Since the property was in a region with few security measures and a low police presence, there was little Sankar could do to regain her stolen materials and appliances.
In a different situation, Daniil Kleyman in Richmond, VA, purchased a project house for what he believed was a decent deal. An experienced investor, he performed a preliminary market assessment on the property and anticipated to be capable of remodelling it and selling it for five times his cost. Woefully, Kleyman made a chain of mistakes that culminated in him losing money on the flip.
Not only did the first contractor he hired leave the project with his money and without finishing the job he was commissioned 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 wanted. And then the assets were burglarized, stripped to the walls, plumbing broken and flooding the basement. After restoring the damage and replacing the stolen appliances and fixtures, Kleyman had to sell the house at a loss to a less-than-enthusiastic client.
Kleyman’s story, above all, is one that establishes a myriad of obstacles that come with flipping houses for resale. This investor would have vastly profited from accurate market data, proven construction professionals, and the expertise of property management professionals from the start. Think how this circumstance might have transpired had he invested in the property as a rental home instead.
Alternatively, consulting with an industry expert like Real Property Management Richmond Metro, he would have gained a detailed market assessment prior to purchasing the property. He would have known the market value of the property from the start, feasibly changing some of the choices he made thereafter.
RPM Richmond Metro would have also supplied Kleyman with the names of trusted remodeling and repair vendors in his territory and would have supervised those vendors repeatedly, immensely diminishing the probabilities that the contractor he hired would take his money and bolt. Eventually, the team would have accurately priced and marketed his new property for him, identifying quality tenants available to pay a competitive rental rate every month for as long as Kleyman wanted to keep the home.
Even with these clear benefits, some investors acknowledge that allying with a property management company is overpriced. Regardless, as this example shows, Real Property Management Richmond Metro has valuable services and business connections that can help investors make far more money long-term than flipping houses might bring. Essentially, 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 support of a team committed to making every one of your properties one of the best long-term investments you own. For more information, contact us online or call us at 804-417-7005 today.
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