Lots of people tackling a house flip (or even just looking to add value to their home via a renovation project) will go into it with the mindset that they’ve got to completely gut every room down to the stud and build it back from scratch, as that’s what the “pros” do on those television shows.
The truth is actually far from that, especially in today’s market. The biggest mistake new flippers make is thinking that adding value = massive remodel, when the real math behind that equation usually looks more like massive remodel = huge expensive learning lesson.
If you’re just getting into flipping or home renovation, you’re almost always better off by starting with a much simpler project, as it’s maybe 1 in 100 flippers that can pull off a major renovation successfully. Once you have a core group of contractors and sub-contractors lined up, sure, knock yourself out, but when you’re just starting out you’re learning by trial and error, and it can be some very, very expensive lessons if you tackle a major project right out of the gate.
Even in today’s tougher housing market it’s still possible to find deals that make sense as a cosmetic fix and flip, especially if you stick to the basics such as paint, flooring, trim, and landscaping. You’re not going to make millions tackling projects such as that, but it’s always better to get some easy wins under your belt and make $3,000 here, or $5,000 over there before you move on to more challenging projects that have a much larger potential profit margin.
House flipping today really is a marathon, not a sprint, and you need to adjust your expectations and the types of deals you’re looking for accordingly.