At any point of taking on something new you’re likely to have some thoughts creep in. Doubt, uncertainty and inexperience. All likely with anything new but when you change your thoughts you’re well on the way to allowing the learning to begin. This week we’re walking through those beliefs that can delay or completely derail you. Sometimes, before you ever begin.
You need experience before you start
All day, every day, I share that this is absolutely false. If this was true, then there is no way I could have flipped 200+ houses. If I can start with absolutely no experience you can too. A bonus to starting now is that there are so many resources available. Everyone who flips at one point was a beginner. There is always a first project. You can learn. You can figure it out; but most importantly if its something you want to do find a way to do it.
There can’t be a 50th flip if there’s never a first flip.
Cash is always required
While having cash can make your options a bit simpler; I would argue that having multiple sources for funding is better. If you believe that you can only flip when you have cash there will be plenty of profit that passes you by. Find a way to fund a flip and start.
There are plenty of resources and different funding options to use. If the idea of paying fees or interest to borrow money is holding you back, consider this. If you make 30K on a house flip and you pay 10K in fees and interest was it worth it? I say yes because there’s still a 20K profit. If you pass on it, there’s no profit.
Contractors are shady
Everytime I talk to people about contractors I hear one of two things. Either they’re so hard to find or they are hard to work with. To the first question I always ask where have you been looking? And for the second question is “whats been hard about working with them?” The majority of problems are around a couple of areas. Expectations and communication. Both of which, can be fixed if you know how to set the plan up before you start. Always give someone the opportunity to decline the job by being specific about what you’re needing from them. It allows you to find the right person.
My Realtor Needs Investing Experience
Traditional agents build their businesses working with buyers and sellers. Some may work with investors or be investors themselves. When it comes to the type of agent you work with these are all secondary. The number one characteristic an agent you work with should have is responsiveness. If you email them to ask them for comparable sales data or to schedule a showing those are tasks that cannot wait for a response. When it comes to working with an agent their ability to provide you with the information you need is a priority.
For the flip to be a success;
nothing should go wrong
When I share my story with other investors I make one thing very clear. There is a lesson to be learned with each and every project. It is those lessons that collectively prepare you for other opportunities that you haven’t even entertained. I started out buying 30K houses with 30K renovation budgets. But I had to do those first and learn all the lessons before I could move onto the houses that were 300K. When we look at each step as preparation rather than an obligation, it shines a different light on the process.
There’s a perfect flip
While there are some houses that are better flips than other there is no such thing as a perfect flip. People spend time looking for what they think is going to be the ultimate combination of all the things you want in a flip and in the meantime there are other people building their flipping businesses. The combination of potential, purchase price, renovation budget and resale value is something that can be found on many homes. Don’t restrict yourself into thinking that there’s a magical combination. Keep focused on the goal and you’ll be surprised at how quickly you’ll start finding flips.
Design and material choices are hard
When you are making decisions for your flip remember, it is not personal. You are not creating a space that appeals to a single person but as many home buyers as possible. Keep the choices classic, simple and proven. An experienced realtor can be a great resource here since they see homes and have a familiarity with what buyers want. Another idea is to bring in a designer for a flat fee for a consultation. They can suggest finishes and colors to create a space that has wide appeal.
Don’t Worry About Research
The little secret people don’t talk about with flipping? There’s always something to research. For you to submit an offer and feel confident about your project you need to know how to analyze numbers. Since every market and area are different you must have familiarity with where you are buying will also be incredibly helpful as you look for potential projects. I have now narrowed my areas and I can tell simply by the price and size of the homes if there is profit potential. The more research you do the sooner you are able to identify projects that are potentially profitable. Knowing your areas will also allow you to pivot quickly should there be changes in the market.
You don’t need a “hard’ budget
One of the “musts” I stand behind is a budget for every single project. On every house I create a preliminary budget to initially determine if the project is profitable. Once a purchase agreement is in place and bids are received, I will input those numbers and track any adjustments as the project moves forward. Knowing where these numbers start and end is important for future projects. If there were overages or shortages then I know for the next time how to better estimate. The other advantage is if I add something and have a number assigned then I know in the future if I want to add that item again. Like a deck or driveway.
Spring is the best time to sell
Yes, spring market may have increased activity. But, in the past few years spring market hasn’t been much different from the typical market. With low interest rates and strong buyer demand, the seasons haven’t had as much of an influence as years past. Increasingly buyers are looking year round rather than waiting until spring to avoid competition.
I’m Ready to Flip, What’s Next?
Ready to take that next step when it comes to flipping?
That’s why I’ve got additional resources to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home.
There are several videos available on finding houses, renovations, and funding on the Threshold Homes YouTube Channel. Check out your favorite flipping topics and new videos weekly.
You can’t close a successful and profitable flip unless you start. What is your biggest challenge is with getting started house flipping? Let me know. It may be an area I’ve also had questions about myself. I’m here to help so drop me a DM.
Want to buy a property and renovate it?
Get my checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Follow us on IG @thresholdhomesmn and FB @thresholdhomesmn to see the projects we’re working on. And for more ideas on renovating & restoring fixer-uppers!
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the house with the most “flip” potential.
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