What's the biggest lesson you learned from flipping houses?

Question

Good Morning BP!

What's the biggest lesson you learned from flipping houses? Do you know use this lesson as a tool in your new flips?

Scott E. · Answer

I can't sum it up into 1 single lesson. Here's a handful of lessons I've learned, in no particular order:

1. Location is more important than anything else

2. The project will always cost more than your contractor says it will

3. The project will always take longer than your contractor says it will

4. Hard money is very expensive

5. Hire a designer

6. Get a permit when you should get a permit

7. Stage every house before selling

8. Always have a back up plan

William Harvey · Answer

Buy right. You absolutely make money when you buy, not when you sell. The way we put this in practice is buy being extremely conservative with our ARV calculation when we analyze the deal. That's vitally important, especially in this current market we are in.

Chad Shultz · Answer

Katlynn,

It seems many folks, in my opinion, make a lot of errors by assuming others will follow through.  There are many good tradesmen and tradeswomen out there, but a large number of them work from dollar to dollar.  When possible, most of them will line up many projects, to make sure the dollars are coming in as a constant flow, but they don't usually have the time to adequately do any of those projects.  I would say the single largest lesson is not to trust your end result in someone else's hands, especially when that person's result is not tied to the overall performance of your project.  Think about it:  Most contractors will get paid by the job or the hour.  They don't care if you make a profit, or what that profit is.  If you want to ensure maximum profits, fewer problems and a result up to your required standards, you must oversee what is being done.

Dianna Ivanov · Answer

@Scott E.

All very true!

I think for me, the key was learning

-I make my money when I buy.

-Black and white bottom line

-No emotion.

-Factor in all the things that could go wrong -if they do I’m prepared if they don’t I’m ahead of the game.

Marty Boardman · Answer

There are some problems that price can't fix. I've looked at houses that the owner could have given me for free that still wouldn't make a profit.

Bob S. · Answer

ALWAYS buy right, and ALWAYS assume your reno will be more then you expect,

Eliott Elias · Answer

It is draining and takes up a lot of time.

Katlynn Teague · Answer

Thank you so much to everyone who took time out of their day to answer my question. You all gave me excellent advice to be aware of and implement. Thank you so much!

Steve Vaughan · Answer

I learned they are horrible.  Cost and time overruns are a given.

But at least indigestion takes over your life and high transaction costs and taxes at ordinary income rates await.

What's the biggest lesson you learned from flipping houses?

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