Joe Homs, a broker with 40+ years in real estate, walks through how to flip houses without losing money in a recession. Start small with condos, research permits and market demand thoroughly, calculate your after-repair value accurately, and match your finishes to what buyers in that neighborhood actually want.
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Today we're gonna talk about a topic that is especially relevant right now, house flipping mistakes to avoid during a recession. As we all know, the housing market can be unpredictable. During a recession, it can even be more challenging to turn a profit. It doesn't mean it's impossible. In fact, I believe with the right strategy, mindset, and skills, you can still make money flipping houses during a recession. The key is to avoid many mistakes that I've seen many investors make. Hi, I'm Joe Homs, and I have over 40 years of experience as a broker, mentor, And investor, and I want you to subscribe so that you never miss a video. Number 1, overestimating your flipping skills. Flipping takes time, it takes effort, and it takes some knowledge about what you're doing to make sure that you're doing everything correctly. Now, how to avoid that is starting small, I like actually to start with condos because they're easy to do inside. You rehab the property, the HOA takes care of the outside, so you don't have to do painting, roofing, landscaping. All that stuff just adds on to a flip. So start out small, keep your project as small as possible, learn the ropes from somebody like myself, find a mentor out there. That is flipping and doing it on a daily basis and see if you can just tag along to see what's going on, how he does it, things like that. So yeah, make sure that you start out in a manageable way so that you're not going to run into trouble. Mistake number 2, know your product, know your area, Know what it is at the end of the day when you purchase something, that it is in an area where you're going to be able to sell it quickly. Make sure that you check with the building department to maybe see that there's some special rules that you have to follow, you know, special permitting that needs to be done. Make sure you check your setbacks. Things like this, because the more you know about this particular project up front, the easier it's going to be to sell it and flip it at the end of the day. Hope you're getting value out of these videos. All I ask in return is that you hit that like button. Mistake number 3, not having a solid plan. You need a solid plan from beginning to end, to the exit, to the purchase To the exit. And that plan, that plan either needs to be written out or it needs to be in your head, and you need to follow that plan as closely as possible. Yes, there's going to be some hiccups along the way, and hopefully you learn how to deal with those hiccups. But pretty much when you buy a property, you should be able to figure out What the after repair value is and what you're going to be able to sell it for at the end of the day. Because you're making your money on the purchase of that property, because you know that you can purchase it at this amount and sell it at this amount. You're going to make a profit on that property. Don't do any wishful thinking. Don't say, yes, I can sell this house, which is exactly the same one as this other one. And then you just don't account for that other one having an ocean view. So it may be the exactly same house that you're flipping, but that one has an ocean view. That one's going to be worth more even though it's the same floor plan inside. So make sure you have a plan from the beginning to the end so that you don't have any issues along the way. Mistake number 4 is not being realistic with your expectations. And this is not an uncommon mistake for flippers. I see flippers all the time going into these projects and they're looking at it from the mindset, how would I want to live in this property? What are the items that I would look for? And those are the kind of materials I'm going to put in, which is a big mistake. So you want to flip basically to the masses, and you want to use items that are going to go into this property based on the value of the property. So if I'm flipping a $200,000 condo, I may not put in a high-end appliance in there. It may be literally coming from Home Depot or Lowe's or any of those places. And if I am flipping a $2 million property, then they're going to want to see custom appliances in there. So I may be spending, you know, $5,000, $10,000 on a stove where I would not necessarily put that into the $200,000 condo. So be careful that, you know, you are not going to live there. Okay. And that's a different story if you're going to live there, but you're not going to live there. So gauge it on the price of the home, what you're going to put into that flip. During a recession, be a little bit more realistic and make sure that you know the market may be way slower than you were anticipating. Remember, real estate flipping can be a lucrative venture, but it's not without its risk. By avoiding these common mistakes, you can increase your chances of success and profitability. If you have any questions or comments, please leave them down below. If you need more one-on-one help, please book some time with me. Here. If you want to see some more flipping videos, click on this video right here. Reach out anytime. I'm always here to help.
