Mistakes That Can Turn a Flip into a Flop

I know many of you have often thought of becoming "flippers". While this segment of the real estate market is not as active as it was a few years ago, there's still opportunity out there. But one must be preparred. So, from USA Today as republished in Realtor Magazine, I'd like to share like this list of 10 mistakes that could turn your flip into a flop:

1. Liar loans. "Lying on a mortgage application is a federal crime," says Joseph Falk of the National Association of Mortgage Brokers. "It includes bank fraud, wire fraud and mail fraud and potentially a host of state offenses. This can result in jail time."

2. Overpaying. No matter how promising the property, the bottom line is trump.

3. Lacking cash. Desperation makes investors do crazy things. When you act in haste, you're more likely to make poor decisions.

4. Quitting your day job. A steady source of cash staves off desperation.

5. Hiring unlicensed contractors. Not only do they present an insurance risk, but worse yet, often they don’t get the job done.

6. Buying sight unseen. You can bet it will be uglier than the seller said it was.

7. Buying property far, far away. Even the tiniest repair can mushroom into a crisis.

8. Buying too many properties too fast. Too much money, too little time.

9. Underestimating remodeling costs. There’s no such thing as a cheap and easy fix.

10. Having a poor exit strategy. Running out of cash and living on credit cards doesn’t work.

At least one of you is asking yourself..."why didn't I have this list earlier...I would have saved myself a lot of money and agrivation."

Source: USA Today, Noelle Knox (10/23/2006)