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The 7 Deadly Sins of House Flipping

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When I first started flipping home, I made so many mistakes. It was strange that I achieved it even in the first few years as a full-time real estate investor.

The big difference when I made it at that time was that I thought it would sink if I made a mistake. As we discussed last week, the worst fears you’ve noticed aren’t as bad as you might think of.

I heard the quote I once said:

“The more I make, the closer I get to success.”

I don’t think so On purpose Making mistakes is the way to go when you’re doing something. Mistakes are inevitable. But the biggest thing is to learn from mistakes, never commit again, and keep moving forward.

Of course even today I still make mistakes every day – But the difference is that no one now sinks my business unless I suddenly lose my mind completely and lose my judgment altogether.

And none of them are as bad as you might think when they happen.

But the biggest mistakes I really do my best and no longer make can be summarized in seven big mistakes.

And if you continue to commit these sins, your home-turning career can be quite short.

The truth is told … I’m writing this today as a reminder that I shouldn’t do them (sometimes hard to resist)-but I hope you avoid them ..

This is a little “blog therapy” for me LOL.

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Seven deadly sins of house flipping

So OK, you’re going to make at least some of these in your real estate investment career-Nuff said. Can you avoid committing these sins consistently?

Unless you want to be blamed for real estate investment hell-surrounded by bad credit, debt, and worthless property-avoid these bad boys at any cost:

1. Desire – Fall into desire in real estate

As a real estate investor, you spend so much of your time finding and finding transactions that invest so much time – trying to find something that works for you. In fact, when I researched the members of the House Flipping School, “finding a deal” was the number one problem at the moment.

Previously it was a cheap way to turn a house over, but this has become a major problem for many home flippers as foreclosures are depleted and properties are becoming more and more difficult to find.

But finally all your efforts begin to pay off, and that’s when you see it — the perfect home inside out.

It’s in a good neighborhood, but it’s the worst house in the block. cool. It has a lot of “potential” and you can see with your own eyes how wonderful it is when you have its first open house.

You have finally found the perfect property. You start wanting it …

You put in your offer and wait for a reply – you know how great a deal it will be.

But the seller isn’t sticking out. Your MAO, or “maximum permissible offer,” is too low for them, even after raising thousands from the original bid.

The house is very cool, maybe this is only once, I break the 70% rule and cross my MAO. After all, the house is a good killer!

Is it worth it?

error. Stick to your rules. Follow the MAO rule, 70% rule – Don’t be drawn into the siren song … and the ship playing the house is heading straight towards the big Jeddy …

Think with your head. Don’t fall into desire. If the numbers don’t work, they don’t work and don’t perform that “erasing math”. move on.

2. Pride – do everything yourself

Oh yeah, pride.

For me, this is a difficult thing I had to learn over and over again. But now I’m much better …It used to be terrible.

So many new real estate investors dive into devastated hell holes (by the way, these are the most ideal for our flippers), pick up sleds, break some walls and pull out nail guns. .. Tool belt holster, erect some walls, fix a little electricity, wipe out dust and hit a new layer of paint.

It’s done. Fix it and turn it over – it’s done!

How difficult is it anyway? TV people show it very easily, right?

No matter how small the rehab, it’s not that easy. The truth is to rehabilitate in the right way, which is a very complicated task. As a result, even the most experienced contractors find it difficult to do everything themselves.

You may know a little about flooring (guilty), but why do you have to pay someone else to install a new subfloor in a rotten bathroom? I think I can do it myself.

Two weeks later, on dozens of trips to The Home Depot, you are now thinking of yourself Why was it so stupid!

Remember that in-house, not only cost but also time is reversed. Time is money – literally. If I could flip in six months with a professional crew instead of doing it myself, I could have saved hundreds of dollars in labor costs, but because I own the assets, I’m raising money. And could have spent thousands of more dollars on freight costs. It’s been 6 months longer than expected.

Nothing is worse than kneeling at an unexpected soft cost that destroys your home’s flip budget.

It leads us to the next sin …

3. Garbage – Excessive spending on rehab

Many house flippers think they need to create everything that flips, as if they were buying it themselves. I need to have 30 square feet of 11/2 inch granite in kitchens and stainless steel appliances – Because that’s what I want in my kitchen!

When you’re refurbishing your flip, you don’t want to go to the extreme and want to get the cheapest of all. If you do, potential buyers will be aware.

Similarly, you need to wisely involve your costs and extra dollars where it has the greatest impact. For example, granite countertops are great. I love them in the kitchen and flips … but only if that makes sense.

For example, in one of my successful flips, I installed granite in the kitchen, but the countertop area was so small that I knew if I had installed it, so I could make the house more cost-effective. I was able to make it look gorgeous. money.

With that flip We sold it and made a decent $ 56,000 or more profit – And it was after all the costs.

We also added a back deck and vaulted ceiling to the master bedroom at a low price. Both got so many compliments.

It sold in one day from the question.

Was it a countertop? Was it a deck? Was it the vaulted ceiling of the master? Can be.

The important thing is that you don’t have to spend too much, just spend in the high-impact zones. In that case, please be careful not to exceed the predetermined budget. If so, be absolutely confident that you will get it back – otherwise you may run the risk of losing money on the project.

4. Anger – upset when things go wrong

In many cases, I wanted to strangle the contractor..

If you turn it over, things will go wrong and people will be confused. Deal with it. Don’t let it feed you.

Many unexpected problems can occur during the flip. Expect at least 20 flips on average.

twenty? Yes, it’s 20. Expect a budget and it for it.

If you only have 10, consider yourself lucky.

So when they happen, expect them and don’t feel good. Don’t regret it later. I want to ring the contractor around my neck …

But I deviate.

When he misses the schedule for the drywall guys … before the insulation is complete, and before the home inspector does an electric walkthrough … you might want him to have it …

please do not.

Take a deep breath and control the deadly sins of anger boiling in you. I’m not saying this is easy, but it will be difficult, but keep in mind that you really need him. Probably more than he needs you.

So treat people who are not angry and dignified. That way, an inside-out carrier in your home (not to mention your blood pressure) would be even better for it.

5. Desire – ask too much

We all want to make money in this business, but indirect approaches can be more successful than direct approaches.

This means that if the initial asking price of the property is reasonably reasonable, you will eventually be able to make more money. If it is much higher than the potential buyers of their right mind pay, you may lose the interest of some promising prospects.

Eventually you’ll have to change the price of the property and relist it, but it may be too late to reach the top candidate by then. All the while, the longer you hold, the more your soft costs and your financial costs will be summed up.

Price it correctly and listen to your broker and the CMA you get from your broker. After all, it’s better to meet a small number of demands than to guide the entire school of fish.

6. Envy – Trying to get Rich Quick

It’s certainly nice to be rich.

Getting rich slowly isn’t that sexy … but that’s how it really works.

So many gurus are online with the message that they will be rich in this business. A software program that helps you find property from the comfort of your home. Hot shots of driving a baby and Lamborghini in a bikini, all with a snap of your fingers.

In reality, flipping a house takes a lot of time and effort, just like any other. If there really was one hidden secret that could make you a millionaire overnight, I would get it side by side first.

If you have been Here at Bigger Pockets No matter how long the time, you will know that it doesn’t work that perfectly.

When buying real estate, there really isn’t one payday that will make you a tremendous amount of money and solve all your problems. Then you can retire at some beach and count your cash.

Real estate investment and turning over a house is a process. Your job is to optimize your chances of making as much money as possible in each property. Once you’re good at one at a time, you can start scaling. At that time, you can work on multiple projects at once and generate diverse income from several different sources.

Maybe some are flips, some are rentals and some are spec homes.

But at first, focus on just one, TRUE Skillful.

When I wake up tomorrow, I look under my pillow and live in a million-dollar mansion with a baby in a bikini, with hundreds of thousands of dollars piled up on the desk right next to Rambo’s key. Don’t expect to notice that you are.

Instead, get to work. Take a step forward every day. Do it every day, and that’s how you succeed.

For now forget about Rambo and focus on the next step, the next step, and the next step …

7. Sloth – Take no action

One of my wife’s DVDs, when I look at the DVD drawer near the TV, has a “brave heart, in the sky of the show shank, or in the process of finding stripes” called “boot failure”.

Without checking IMDB, I think Sandra Bullock is in it and Brad is something or something else that looks like he’s appearing in every movie right now …

I haven’t actually seen it, but whenever I saw it in a drawer, Im was always impressed by the title “Launch Failure”. The movie may be unexploded, but the title is good.

The reason it resonates is that the title encapsulates a single issue that is most common for novice real estate investors.

It was Also my biggest problem when I first started – Start the process in the first place.

Educating yourself and preparing for success is very important – And I highly recommend learning as much as possible for people to succeed -take actual Action is the most necessary step of all.

There is always a lot of information to learn, some of which can be obtained during the process.

Start by writing down exactly what you want to do, and start completing each step to achieve it. Don’t be lazy. Get to work instead. For the first time, don’t fall victim to the deadly sin of doing nothing. In this case, the deadly sin of laziness.

Or more bitterly …Launch failed.

Because when everything is said and done, you will never be the flippers of your house from your couch.

If you go this far, Please leave a comment below!! What mistakes and sins have you been victimized by? Did I miss something?

Please let me know by leaving a comment below!

Photo: Scabeater

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