Sacramento Home Journal

Purva Brown
June 23rd, 2007
All the Rest, Neighborhoods, Sacramento
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This has got to have been the most painful episodes I’ve watched on TLC’s Property Ladder. A young couple - they were 21, I think, bought a home in Del Paso Heights hoping to flip it and make some money. After an agonizing hour, the show ended with them having made maybe $10,000. Bad contractors and just wood rot threw them overboard and they may have walked away with the $10,000 if they were lucky.

Sad. But not the only case of flipping houses here in Sacramento gone wrong. This year, in early spring while I was out previewing properties in the Colonial area, almost every other house on the market was someone’s ambitious flip gone wrong. Failure, when it relates to homes, is extremely painful to watch.

So what can you do to avoid these mistakes? Here are a few ideas:

1. Know the neighborhood - know the prices like the palm of your hand. If you don’t know what the houses are going for, it gets easier to let optimism get you carried away. Also, make sure you can get to the neighborhood easily. Anything more than an hour’s drive is too far.

2. Do the math. This should probably be number one. If the math doesn’t work out for you to make a profit that’s substantial, do not do it. The carrying costs might eat into that profit and probably will. The best math will not save you from a market crash, so do more than your homework and leave some wiggle room.

3. Get to it! This is the biggest piece of advice I can give you. Vacant homes are a liability. The sooner you can get done and get out from under the mortgage, the more profit you can make. Time is literally money. Treat it as such.

More tips coming up! Mostly from experience, so believe them!

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