3 High Expense Traps in Fix and Flip

3 High Expense Traps in Fix and Flip

Watch out for these three high expenses in Fix and Flip. Welcome to Wealthy Wednesday. There are some dark spots with money or expenses in Fix and Flip. 

So the number one is when you buying a property from a wholesaler, you could end up paying a high price because depending on how many wholesalers are involved, a lot of time one person, wholesaler acquired the property, then another person marketing the property. So add their fee, then another one get property from here and there and then email to everyone making some money on top of that. Sometimes when you're buying a property from wholesaler, you may end up paying 30, 40, or $50,000 over the price actually the seller got. So that's one thing. So make sure that you are buying from a direct home seller, there's no assignment fee they are charging and then do your numbers and preferably buy from a direct seller. There are different ways to get that. So that's another video we have.

Number two is the lender. Sometimes the lenders charge a lot of hidden fees. They charge in points. Some lenders are really crooked. They even have hidden fees, when you sell the property, they charge you points. So be careful. Read the fine lines. Read all the fine prints. What are the fees you are paying? Because that could add up a lot of money. 

Number three is the contractor. Definitely find a trustworthy contractor who is not going to give you one price at the beginning of the work and another price at the end of the work. There could be some repair comes up in the middle, but it should not go so much that you end up paying a lot of money for the repair. So watch out for that too.

So when you buy the property, make sure that there's not too many middlemen involved. Number two, the lender fees and the interest rate. And number three is the contractor, the fee they are charging. It's better to hire a contractor with a reference and also get estimates from different contractors. Check what kind of job they did before. Do some research. It's a time consuming thing but it's your money.

Avoid these three traps. Hopefully this information will help you find the right investment property for Fix and Flip and make some good money. If you have any questions, give me a call. I'll be glad to help you at any aspect of real estate investment. My name is Shawn Bhakta from Remax Presidential. Glad to help.