Flipping homes is growing in popularity due to its supposed “ease.” Novice investors believe they can purchase a property in need of renovation at a reduced cost, make a few cosmetic changes, and put it back on the market for a massive profit. However, Brad Ransome explains that house flipping isn’t quite as easy as that, and many beginners may have more flops than flips if they aren’t careful.

While loads of mistakes can be made, especially at the beginning of flippers’ careers, understanding the most common ones outlined below can help newbies avoid flopping early on.

Having Insufficient Capital

Despite what some TV shows may imply, real estate is expensive.

Initially, there’s the property acquisition cost plus interest for those using mortgages. But underestimating renovation costs can make or break a good deal.

To make a profit, the final sale price must be above the cost of acquisition, holding the property, and the renovations. Not to mention that capital gains taxes eat into any profits.

Newbies tend to underestimate the amount of money they need to truly craft a good flip. This is especially common when homes have unforeseen issues not accounted for, like broken pipes, mold, and termite damage. All of these underlying issues must be addressed, on top of the cosmetic changes planned. Ultimately, this can turn a gross profit into a net loss very quickly.

Underestimating the Time Required to Flip

There’s no denying that renovating any home is incredibly time-consuming. Let alone a project planned with a deadline.

Finding and purchasing the perfect property can take months. Then, upon purchase, flippers must invest time and capital to conduct repairs and renovations.

Before a property can be put back on the market, professional inspections are needed to ensure the home complies with building codes. If it doesn’t, flippers must spend even more time and money ensuring the home is compliant with the inspection requirements.

Finally, selling the property isn’t necessarily a quick ordeal either, especially when deciding to forego a realtor in today’s volatile market.

Overestimating Skills

Skilled tradespeople and professional builders tend to flip houses as a side hustle. After all, they have the skills and experience required to fix houses and make a decent profit.

Experts say that the real cash in house flipping is made by sweat equity. Those who can lay carpets, roofing, install appliances and electrical, and much more, are well suited to this profession.

With that said, those who don’t have pro-level skills will need to hire a contractor to do the renovations for them. While it’s certainly a viable option, this can drastically reduce the chances of turning a considerable profit.

Not Having Enough Knowledge

Picking the right property at the perfect price in the best location is critical. And even if an investor gets a once-in-a-lifetime type of deal, knowing which renovations to prioritize can make or break an investment. Otherwise, they risk spending more money than was necessary, cutting into profits.

On top of that, investors must understand local zoning and tax laws, so they can understand when to cut their losses and ditch the project before it swallows their money. To avoid this situation, set up a good due-diligence process.

Failing to Practice Patience

Additionally, experienced professionals usually take their time and wait for the right investment property. However, novices are known for their enthusiasm, which can lead to jumping into a property that may not be the right fit as far as potential profits and resale.

Novice flippers should also seek multiple offers for contractors on the project. Many eager investors don’t take the time to research the right fit for the job, which can cause timeline issues and additional costs down the line.

At every stage of house flipping, patience is key. After all, Rome wasn’t built in a day.