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There are plenty of way to close a wholesale deal or flip a house, but what catches the real estate investor off guard are the little mistakes or sometimes big mistakes that make people nervous about a sale. Beware of falling into these traps! Real estate wholesaling is all about closing the deal. You may spend a lot of time looking for a house to flip or you may spend very little. You may keep a house flipping guide by your side at all times, but when it comes down to closing the deal, you need to be a good seller.
Bragging Rights:
They say a first impression is very important and that is especially true of the first meeting with your homeowners. The goal of this meeting is to get them under contract with you to sell the house. During that meeting you want to be polite and professional. That doesn’t mean bragging about the hundreds of deals you may or may not have completed already.
House Flipping Tip: Coming off too slick when meeting with a buyer or the homeowners before any contracts are signed can cause you to lose that contract.
Greed:
This is an especially problematic trait for house flippers. There is a tendency to want to bring in just one big sell through house flipping a property. This desire for a large cash payoff can cause the investor to lose the chance to make any sale on the property. An asking price that is too high will be out of reach or unattractive for potential homebuyers.
House Flipping Tip: Take the first good offer that is made on your real estate wholesale or house flip.
Impulsiveness:
Your best chances for making a profit in real estate wholesaling is to create a process and perform due diligence before signing anything. Some investors just want to jump right in on a house flip or wholesale. So, they sign that contract before figuring out if they can really make a profit on their investment of time and money. Take a little time to calculate the market value of the property you are interested in compared to the price the homeowners are asking. Then, you’ll know what you can offer the homeowners and what you can ask in finder’s fees from the buyer on a wholesale.
House Flipping Tip: Perform Due Diligence and develop a plan for your house flip before signing.
Real Estate Pitfalls:
You can also fail to close a wholesaling deal through some common pitfalls that crop up. The failure to make a closing can be very damaging to the house flipper, who has to cover the investment in the property and carrying costs until it sells.
Over budget:
It’s easy to get over budget when fixing up a property for the house flip and that can ruin your bottom line even when you sell the property. Keep a tight rein on your remodeling budget during a house flip. That means paying close attention to your contractors, being sparing with what you purchase for the home and being vigilant about turning off utilities or remembering to turn off things like the lights when you leave the home.
House Flipping Tip: Set a budget and stick to it.
Lazy Contractors:
It’s the proverbial contractor who is always claiming to be done in ‘two weeks’ but he or she tends to run into the months late time period. There are a lot of great contractors out there, but also a few poor contractors. When you are remodeling a house to flip, you’ll have to do your research before hiring a contractor. You’ll also have to be willing to fire that contractor if he or she isn’t up to snuff.
House Flipping Tip: Research a contractor before hiring and don’t forget to ask for references.
No Inspection:
Don’t just take the homeowner’s word for it. Pay to get an inspector to look over the property before you enter the purchase agreement. This way you’ll have the information you need to fix up a property and won’t be caught off guard by any major structural problems. It’s also a good idea to have the inspector’s report on hand for the buyer.
House Flipping Tip: Pay the few hundred dollars up front to have the property inspected.
Any of the above reasons can be the cause of your inability to close a wholesaling deal. Stick close to this house flipping guide and you’ll find that you are more likely to flip those houses successfully