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Dangers of Flipping A Home

Flips are great…when they go right. Those are often the stories you hear from friends who know friends about the guy that make a killing flipping a house. That does happen and we do it every year at Ali Safavi Real estate. Real estate, however, is not always a sure thing. Problems arise out of your control, and all of a sudden the regret starts setting in. While you can’t prevent problems from happening, you can be ready for them. Here’s what you should be preparing for.

Neighborhood Changes

You buy a house today, and in a year the neighborhood could be completely different. This could be good, or it could go downhill fast. Make sure to do your research. Are businesses coming in or moving out? What’s the vibe among the neighbors? Don’t have blinders on to everything that surrounds the house – even if it’s a great deal.

Rates Will Change

An interest rate hike can turn an affordable house unaffordable and how you’re stuck in an investment you can’t get out of. The best you can do is monitor.

Selling Price

When evaluating a deal, you must take into account what the selling price WILL be on the home - known as the “after repair value” or ARV. Most real estate professionals can do a market analysis based on your rehab plans to provide you an estimate. Appraisers can also provide this service. Knowing what it will be worth should give you a better idea of what the buying price should be.

Budget, Budget, Budget

If you suck at math, bring someone on to do the budget. An accurate accounting of what renovation costs will be is crucial to making a profit. Make sure everything is inspected and create a plan for what needs to be fixed.

There should be a few areas where you go above and beyond to create excitement for potential buyers.

Prepare For What You Don’t Know

With renovations, like in real estate, you can't plan for everything. Most likely those problems are going to cost money. Don’t budget yourself so tight that there isn’t room for surprises. Have a surplus, and if you dont spend it, take yourself out to dinner.


Unless you are a repairman, contractors are going to be doing the bulk of the work.. Like with the accounting, this is not the time to cross your fingers and hope it goes well. Thoroughly vet everyone you work with. Get recommendations if you can, and always write up your own contract. This will insulate you if they end up doing a terrible job. Never stick with a bad relationship.

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