My sister flipped a house. By itself, that wouldn’t be a remarkable event, but there are some lessons we can draw from how she accomplished the flip.

She bought the property last October, and moved in after completing some cosmetic upgrades like paint and a couple of new doors. While living there, she did a few slightly more extensive repairs and upgrades, including a new roof on one half of the house, and she corrected a drainage issue near the foundation.

She put the house up for sale the first week in June, and she sold the property within three days for her full asking price. She made a profit of about $15,000 after all expenses. So what lesson can we learn?

Well, the one I would like to focus on for this entry has to do with how she priced the property when she sold it. After running comps and thoroughly researching neighborhood prices, my sister set her price a few thousand dollars BELOW the market value of the home. I believe that’s why the house sold so quickly.

The take-away lesson here is that if you want to move a house fast, you should price it correctly. I’ve seen too many people overestimate the value of their property, as well as try to squeeze every last dime out of the sale. This normally adds significantly to the time it takes to sell, and therefore increases your carrying costs… a catch-22 if ever there was one.

Obviously the whole reason my sister had the luxury of selling for slightly less than market value in the first place is because she bought the property for well below market value in the beginning. This is absolutely crucial if you want to enjoy long-term real estate investing success.

For more on buying value priced property, see my article, Is There One Magic Rule?