Flipping Houses - A Journey turned 4 today!
Incredible online community for real estate investors. This site has it all whether you are flipping houses for collecting rentals. Josh has really got this all figured out.
House Flipping
The business of house flipping involves a lot of difference aspects of real estate investing. You must really educate yourself on real estate values, the differences in different parts of town where you plan to flip, who to use to close your deals, real estate agents to work with, contractors to use, tradesmen to use, other investors to trust and work with, and the list goes on and on. Flipping houses can be extremely profitable and fulfilling if done properly. Done improperly, a flip house can eat your lunch.
Case in point. There was a flip we did on a house in a higher end neighborhood. The contractor I was using at the time started out doing fantastic. He was on the job site from early morning to late afternoon each and every day. He was answering his phone when I called and really knocking out the work. He was doing a great job on another house we were flipping, so I had him start this one at the same time. BIG MISTAKE. He got behind on the first one and it dragged on and on. Shame on me for keeping him around and keeping this higher end house waiting for him to work on it.
Long story short, it took almost half a year to even get the house done. We were way over budget, spending too much on holding costs and even giving a little more to the contractor over our discussed price just to get it done. All very big mistakes. This guy should have been fired after screwing up the first job. The key is to not be lazy. I was busy and didn’t want to have to find another contractor. I stuck my head in the sand and hoped that he would get his act together. Never happened.
The house ended up sitting on the market for a long time and we had it under contract only to fall apart several times. At the end of this house flip, I was pulling my hair out. Flipping houses is not always a piece of cake. Of course, there are times that you can make a quick buck. As happened, when I wholesaled a house for over $40,000. Now that absolutely makes up for A LOT of other hassles that come with flipping. You can take a house that costs very little, flip this house, and make a very decent profit. In the end it is worth the effort to learn how to flip houses and start making some real money.
Top 5 Things To Do When Getting Started Flipping Houses
What is the best way to start if you want to learn how to flip houses? There is so much information out there and it is hard to determine where to begin. How do you get into this game? I’ve given it a lot of thought and decided to post what I think are the top 5 things to do to get started and to succeed at flipping houses.
- Develop the Right Mindset
It is very, very, very important to develop a positive attitude and align yourself with success. You have to be prepared to receive the opportunities that will come to you. Some people have deals coming their way left and right but just are not seeing them because they are not prepared to deal with them. They let fear takeover and they are so frozen that they just cannot act. Your level of desire has to be higher than your level of fear. You will be afraid. Fear will keep you from making some big mistakes, but don’t let it stop you from ever doing anything. You have to be willing to get out of your comfort zone. After a while you will look back and wonder what you were so afraid of.
- Get Educated
How are you going to be prepared to receive the deals that come your way, if you do not know how to analyze them? How are you even going to find the deals that are out there? There are deals everywhere, how are you going to uncover them? You can learn a lot from the awesome online forums available at BiggerPockets.com and FlippingHomes.com. These are great places to learn anything and everything related to real estate. It really helps to make it a point to visit often and just read over what is being discussed to get a good idea of how investing works and some of the issues people are having. It’s definitely a good way to learn from other peoples mistakes as well.
I also highly recommend getting a home study course on wholesaling/rehabbing. Some people steer people away from doing this as a lot of these courses cost a small fortune and they say that everything in the courses can be learned on the forums. That may be true, but there is so much information it’s hard to digest it all and put things in the right order. It’s easy to get side tracked and overwhelmed. A good course can show you the ropes and show you step by step how to flip houses. Good investment courses can be bought for under $200 on Ebay. Go through the course several times and visit the forums to fill in the gaps and clear up anything that might be confusing.
- Start Doing
You will never be completely prepared for every single ‘what-if’ your mind can conjure up. Do not let your fear keep you from taking action. People become real estate investing course addicts and buy $50,000+ worth of courses because they feel like they don’t have all the information they need to cover every possible situation. Don’t get caught in that trap.
Take action. Start marketing even though you may feel that you are not prepared completely for taking the calls. Start taking calls and learning from them. You really do retain more when you are actually doing than you do from just studying. Even if the first calls don’t sound like deals, go and visit the seller and ask questions about the house. You will be a little less nervous if you go into it not worried about whether you will buy the house or not. This is the best way to gain experience. You will learn very quickly what questions you will need to be able to answer. Be persistent and take action.
- Find A Mentor
Nobody cares until you start caring. You have to show that you are different than the 95% or greater of other new investors that never make it. This is why I put ‘Start Doing’ before finding a mentor. Having studied a course and the online forums and actually done some marketing, taken some calls and visited with some sellers will make you stand out. The people that are experienced enough to be a mentor will stop and listen to you and give you the time of day. You’ve already shown that you have a burning desire and will do what it takes to be successful at flipping houses. You will have intelligent questions to ask them by this point.
You can find a mentor by networking with other investors in your area and at your local Real Estate Investor Association meetings. Ask around. Chances are you will need to do a lot of leg work and busy work for your mentor in the beginning. You really have to be willing to give in order to receive. Don’t expect everyone to stop what they are doing and be excited about helping you for nothing. It’s not going to happen.
Really work at finding a mentor. Don’t give up easily. Maybe it will take a couple wholesale deals before someone will finally give in and work with you. So be it. Are you willing to put forth the effort? I know it was worth it for me to give up 50% of all profit for the deals we did with my mentor in the beginning (He put up all of the money and we did all of the leg work. This is an excellent way to start with no money of your own, so don’t let that be an excuse.). Honestly, I don’t think we would be where we are today if it weren’t for him. I’ve heard many others say that most of the really successful investors have had a mentor. That’s probably true for any business.
- Don’t Give Up
Build momentum by continuously and persistently taking action. Set small goals for yourself each Monday and try to accomplish them by the end of the week. Put in the extra time at night and on the weekends. It will get easier. Most investors will tell you that the first deal is the hardest to find and it becomes exponentially easier from there on. Stay focused on the type of investing you choose to do and don’t get wrapped up in trying to learn every single niche. Become an expert in the one you choose and then slowly add the others. Have faith and believe that you will achieve success. As Henry Ford said, “Whether you think you can or you think you can’t, either way you are right.”
