It will happen. When you’re in the business of flipping Edmonton houses, you will always have this risk.
You purchase a flip house at an auction and you find out that the interior needs a complete makeover. You estimate that the kitchen area will cost $4,000 to renovate but it ultimately ends up costing you $8,000 more.
That’s not a good thing right there. Today, we decided to discuss with you how you can turn this tragedy into something “manageable”.
Note: you can access all our available Homes For Sale in Edmonton through our Edmonton MLS Listings page.
FINANCIAL PLAN. First off, you have to allocate money for such unforeseen events. “Plan for the unexpected”. When you’re setting your budget for the purchase and renovation of the property, you have to include the fact that something might go wrong and safely assume that it will.
PARTNER INVOLVEMENT. This is in case you are working with other investors. You can ask them to put more money into the project when you go over budget. If and when you have to do this, be very cautious. Provide your investment partners with a breakdown of the expenditures and a good justification for them.
Bottom line here is to show your investment partners the need for the money and the added value that it will create for the property. If it will bring in more profits, then it’s a just cause.
FAMILY MATTERS. Now, if you do not have partner investors to ask money from, the next best option is to involve your family and friends. As what we have mentioned, as long as you can justify and show them the added value that you are creating, you will ultimately win their hearts and pockets.
Once you have convinced them of the profit that will be made out of the investment, you can ask them to be a part of the venture and become a partner.
If flipping Edmonton houses would be your business career, then over budgeting will happen. No if’s and but’s. You can use money out of your own pocket, ask for help from your partner investors and/or family and friends, all that is part of the business and is quite acceptable. The only thing unacceptable is when you QUIT. Asking for more funds is a risk that you should take to reap that fat reward.
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