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Investing In Colorado Springs Real Estate - Flipping Real Estate

By
Real Estate Broker/Owner with Park Avenue Properties Of Colorado Springs LLC DRE#40004755

I’ve worked with many investors in the past few years. Many have invested intending to flip their property and have greatly succeeded! Experienced home flippers know that there are pitfalls to any promising piece of property and there all investors can only benefit from learning from others mistakes.


Read these 11 pitfalls and mistakes to avoid when Investing in Colorado Springs Real Estate and how to work some of the situations to your advantage.

1. If you don’t have a healthy financial situation, you’re best bet it to put flipping on the back burner for now

 

Healthy Financial Situation Includes:

* Full-time job.
* Income that allows you to put away 10 percent of your monthly income for savings or retirement.
* Six months of income already put away in either a savings account, CD or some other form of liquid holding that draws interest.
* Account separate from your savings or CD with $10,000 for repairs on your future investment.
* Potential investment partner or partners.

2. Don't use a stated income loan, better known as "liar loans."
Stated income loans were created to help individuals with variable income qualify for home loans - e.g., small business owners or those who work sales commission jobs. Very little or no proof of income is required for stated income loans; although, they typically charge a higher interest rate to cover the risk. Click here for more Colorado Springs loan information

3. Don't be untruthful on your loan application.
It is a federal crime to lie on a loan application. You may get the loan, but, if you are caught, you face charges of mail fraud, wire fraud, bank fraud and possibly others. Common fallacies submitted on mortgage applications include an overstatement of income, understatement of debts, and a commitment to live in the home as the primary residence.

4. Don't start without a business plan.
If you don't have a personal financial budget, create one. Then, create a business financial budget that indicates how much you have set aside and what you can allocate out of every paycheck for repairing future properties. If your business plans falls short of savings for repairs, wait to flip until your finances are healthier. If you have questions or would like help creating a business plan for
Colorado springs
investing please contact me!

5. Don't take on too many projects at once.
Start with one property. Once you get your feet wet with a successful flip, go on to another one. Don't get in over your head with too many properties. Unless you have partners who are committed to jumping in with both feet with you, it will be in your best interest to proceed cautiously.

6. Don't buy a home site unseen.
Never, ever, buy a home site unseen. It doesn't matter if it is located in the classiest part of town, the asking price is lower than half of what area homes go for and the seller is willing to pay your closing costs. Simply put, don't do it.

7. Don't buy a home with structural problems.
Structural problems, like a leaky basement or cracks in the foundation, are an invitation to huge out-of-pocket expenses. Even if you have an expert assess the situation and a licensed contractor who is willing to do the work, but still allow you a healthy profit, you don't know that the job won't still turn south on you once you sign on the dotted line. Don't dive into that pond of possibilities.

8. Don't buy the property unless you can afford to carry the mortgage if doesn't sell quickly.
Unless you have monthly income that covers all your expenses and can pay for another mortgage, ignore that flipping itch for now.

9. Don't quit your day job.
You find THE home that is going to net you a pretty penny, one that will pay your salary for a year, and you think, "I can quit and do this full-time!" Think again. You may net a year's salary from the flip; however, you may not be able to do it consistently. Wait until you see that you have the knack for turning properties at a significant profit, and then consider quitting your day job.

10. Don't start without a good exit strategy.
Good intentions don't necessarily develop into dollars. Even if you've done all your homework, followed the ten steps to successful flipping and received a great interest rate on your financing, the situation still has the potential to go south. You received the loan you wanted, performed all the remodeling necessary and you're sure the home will sell the day it hits the market ... but it doesn't. You go through several months of mortgage payments only to find that it simply isn't selling, no matter how much you cut the price. Do you have an exit strategy? Maybe you can rent the property out, rent it out with the option to buy or have someone else assume the loan with little or no money down. Whether you run into remodeling that will cost you more than you anticipated or other unforeseen problems, you need to consider all the possibilities that could occur and have a good exit strategy.

 

11. Make sure you have good advice for your first time investing

Having good advice from an experience flipper or a Colorado Springs investment property specialist is crucial! Many homes have hidden or unexpected problems. Taking an experienced party with you to help you speculate the property could make or break you!

 

I am very experienced with investment properties. My husband and I have our own investment properties and have also helped numerous families invest in Colorado Springs Real Estate! If you are looking to invest in Colorado Springs rental properties or are wanting to flip a property we would love to talk with you!

 

Call me, Tanya Stevenson-Becht, at 719-963-6582 anytime!

Park Avenue Properties

Tanya Stevenson-Becht & Sandy Daniels

www.ColoradoSpringsEhomes.com

office@parkavehomes.net

 

 

 

 

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