There is no doubt that you can earn significant amounts of money buying, repairing and reselling houses. However, it takes knowledge, time, and careful planning to get maximum profits in a minimum amount of time, and if you make a mistake along the way, it can put a big dent in your bottom line.

1. Buy in bulk

The first step in avoiding costly mistakes is to arm yourself with as much knowledge of your target area as possible. You need to know the final sale price of a property BEFORE you even think about making an offer. Think of yourself as a retailer, buying as close to wholesale as possible and then selling at retail once the job is complete.

2. Estimate accurately

Whether you do the repair work yourself or outsource it, in addition to knowing how much the house will sell for, you’ll need to have a clear idea of ​​how many repairs a house will require and how much those repairs will cost. This can be a big mistake if you don’t calculate repair costs as accurately as possible. Of course, you’ll find surprises along the way, but if you added a certain percentage of “cheating factor” into your estimate, those surprises shouldn’t be enough to wipe out your profits at the time of the sale.

3. Plan ahead

Once you start seriously considering buying a home, another big mistake is not starting to quickly get your contractors lined up and doing the work that will be required for resale. Beginning investors often wait until closing to start lining up their contractors, only to find that they are already booked for other work and won’t be able to get to their project for weeks or months. As soon as your sales transaction has gone into escrow, get in touch by phone and start mobilizing your home renovation team. That way, you’ll be ready to go to work as soon as the sale closes, putting more money in your pocket through faster resale.

4. Compare prices

Another common mistake that can hurt your overall bottom line is not buying a lot of materials. You may have to hire contractors to get the job done, but that doesn’t necessarily mean those contractors will be looking for the best buys on things like paint, appliances, fixtures, carpeting, and all the other materials and supplies that will be needed to update and repair a home. for resale. You can save hundreds or even thousands of dollars by buying materials instead of just buying them or having your contractors buy them.

5. Examine the work

Finally, another common mistake, especially if contractors do the work, is simply letting a project continue without constantly monitoring its progress. That means giving up your weekend plans for a while to work on the property or monitor how your contractors are doing.

Remember, buying, repairing and reselling homes is a business and requires just as much business sense and attention to detail as any other business venture. Avoiding common mistakes like the ones we’ve mentioned can add thousands of dollars to your bottom line on each property.