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Updated about 1 month ago,

User Stats

63
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David Martoyan
  • Wholesaler
  • Houston, TX
40
Votes |
63
Posts

What’s Your Biggest Lesson Learned From a Fix-and-Flip Project?

David Martoyan
  • Wholesaler
  • Houston, TX
Posted

Hi everyone,

Fix-and-flip projects can be incredibly rewarding, but they always come with challenges. I’ve recently started focusing on markets like Houston, South Florida, and Indianapolis and would love to hear from seasoned investors:

  • What’s the biggest lesson you’ve learned from a past project?
  • Any tips on avoiding unexpected costs or delays during rehab?
  • How do you handle situations where ARV comes in lower than expected?

I’m always looking to improve my process and would be happy to share some insights I’ve gathered on deal evaluation and contractor management. Let’s learn from each other and make our next flips the best ones yet!

Looking forward to your thoughts!

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Bruce Woodruff
Pro Member
#1 Managing Your Property Contributor
  • Contractor/Investor/Consultant
  • West Valley Phoenix
13,504
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11,652
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Bruce Woodruff
Pro Member
#1 Managing Your Property Contributor
  • Contractor/Investor/Consultant
  • West Valley Phoenix
Replied

That there are no guarantees. Everyone needs to be extra careful and do their homework. And then do it again.

It is actually possible to have a super experienced General Contractor, a very deep pockets money partner, and still lose money on a flip.

The most common reason, in my experience, is having a project run over schedule and placing the property on the market during the off-season.

User Stats

63
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40
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David Martoyan
  • Wholesaler
  • Houston, TX
40
Votes |
63
Posts
David Martoyan
  • Wholesaler
  • Houston, TX
Replied

Thanks for the reply, will definitely keep that in mind! Also I’m curious, though: do you have strategies you rely on to keep projects on schedule, especially with contractors? Or any tips for mitigating risks when market timing doesn’t align perfectly?

This is such a valuable insight—thanks for sharing!

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Kerry Noble Jr
Pro Member
  • Investor
  • Indianapolis, IN
1,078
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2,603
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Kerry Noble Jr
Pro Member
  • Investor
  • Indianapolis, IN
Replied

always add 15% to your budget lol

be conservative with your ARV.

  • Kerry Noble Jr
  • User Stats

    63
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    40
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    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    haha true! You gotta always have that margin of safety 

    User Stats

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    Ryan Irwin
    • Investor
    • Ankeny, IA
    85
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    110
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    Ryan Irwin
    • Investor
    • Ankeny, IA
    Replied

    Constantly manage bookkeeping and cash flow to make sure you stay on budget and/or make adjustments when (not if) things come up to stay on track.  

    User Stats

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    Jonathan Klemm
    Contractors
    Pro Member
    • Contractor
    • Chicago, IL
    2,447
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    Jonathan Klemm
    Contractors
    Pro Member
    • Contractor
    • Chicago, IL
    ModeratorReplied

    Hey @David Martoyan - There are definitely too many lessons to count lol.  I've flipped about a dozen properties here in Chicago, and quite honestly, it felt like something different went wrong on each one of them.

    My biggest piece of advice is to KEEP IT SIMPLE starting out.  Slowly build out a repeatable process...if you continue to change things (as in different types of properties, different levels of renovation, different finish material, different neighborhoods, etc.) you create more variables and make it harder to solve to the problem.

    I am a math guy and less unknowns/variables you have the easier the problem will be to solve.  If you SLOWLY add variables after you have solved the same problem a couple times it gets easier with less risk.

    I sadly had a very hard time with FOCUS and switched things up on nearly every project, creating new challenges.  

    Treat flipping like a business that you want to scale, and you will be successful!  

    business profile image
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    User Stats

    63
    Posts
    40
    Votes
    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    I've learned that the unexpected always happens, whether it's delays or unforeseen expenses, so having a system in place to monitor finances regularly helps make adjustments before they become bigger issues. Recognizing red flags early are key to staying profitable. Appreciate  the reminder!"

    User Stats

    63
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    40
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    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    Hey Jonathan, thank you very much for bringing this up! It is true that as much as it is tempting and desirable to focus on a hundred things at the same time, actually staying focused on a specific thing and trying to master it is a difficult skill. And it is absolutely true that as you try to add new areas of focus quickly you are adding more variables and moving parts making the problem harder to solve! Thanks for this response absolutely love it! 

    User Stats

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    Evan Polaski
    Pro Member
    • Cincinnati, OH
    3,387
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    3,732
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    Evan Polaski
    Pro Member
    • Cincinnati, OH
    Replied

    @David Martoyan, the deal you feel you "need" to do is the deal you will likely lose money on.  Granted, we didn't lose money, but out last flip was bought slightly out of "we have money sitting in a money market, it has been a year since we sold our last flip, and we need to be making some money".  

    We made all of $10k on a $400k investment in about 6 months.  If we had used a lender, we would have lost money.  

    And other is: know the market inside and out.  Latest flip, same are we live in.  Recent renovated comp was larger, but on a PSF, we would should have made over $100k.  But, the people looking in our neighborhood (about 1.3 mi from our house) are all older.  We had a split level.  The strongest comp was a ranch.  Most people that toured it were retired couples.  So, they would pay a premium for a ranch, but would not touch the stairs. 

    So like all real estate, it is know the market inside and out.  Who is looking in that neighborhood? What features are they wanting?  Are the comps, really comps (i.e. ranch vs two story, sidewalks versus no sidewalks, subdivision vs not)?

  • Evan Polaski
  • [email protected]
  • 513-638-9799
  • User Stats

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    Bruce Woodruff
    Pro Member
    #1 Managing Your Property Contributor
    • Contractor/Investor/Consultant
    • West Valley Phoenix
    13,504
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    11,652
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    Bruce Woodruff
    Pro Member
    #1 Managing Your Property Contributor
    • Contractor/Investor/Consultant
    • West Valley Phoenix
    Replied
    Quote from @David Martoyan:

    Thanks for the reply, will definitely keep that in mind! Also I’m curious, though: do you have strategies you rely on to keep projects on schedule, especially with contractors? Or any tips for mitigating risks when market timing doesn’t align perfectly?

    That is the thing about the game we are playing....every job is diferent and you can count on absolutely nothing. So even when I was my own Contractor, I was still at the mercy of Mr Murphy. Who knew about the condition of the wiring inside those old walls? Who knew the price of ____ would jump 25% while we were in escrow?

    Although we absolutely must do our comps for ARV and handle the Subs with an iron hand and blah, blah, blah....but a lot of this game is pure dumb luck. All we can do is do our part diligently and we will make money more often than we lose.....


    User Stats

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    V.G Jason
    Pro Member
    #4 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
    • Investor
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    V.G Jason
    Pro Member
    #4 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
    • Investor
    Replied

    Always be in front of the contract and prioritize where you're buying and entry price. lf all those are three in your favor, you have a lot of leeway with some of the normal but difficult parts of a fix & flop/hold.

  • V.G Jason
  • User Stats

    63
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    40
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    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    Thank you Evan  for sharing your experience, there’s so much wisdom in what you’ve said. Jumping into a deal just because it feels like you "need" to can be tempting, but as your story highlights, it doesn’t always lead to the returns we hope for no matter how hard we try and convince ourselves that we know everything, it is like the universe pushing the other way around against us.

    I especially appreciate your point about really knowing your market. Understanding not just the comps, but also who your buyers are and what they value—like ranches over split levels for retirees—is such a game-changer. Real estate isn’t just numbers on paper; it’s about people and their preferences, which can be hyper-local.

    Your insights reinforce the importance of disciplined investing and doing the homework to understand your specific market nuances. Thanks for sharing this, it’s a valuable lesson for all of us!

    @Evan Polaski

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    User Stats

    63
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    40
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    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    This is Beyond Fix and Flips or real estate, this is pure life advice! 

    I want to say that this is pure wisdom and years and years of knowledge and experience!

     @Bruce Woodruff You’ve captured the unpredictable nature of real estate perfectly! No matter how much planning and due diligence we do, there’s always an element of uncertainty, whether it’s hidden issues like wiring or unexpected price jumps. Mr. Murphy definitely likes to stay busy in this business!

     I completely agree that while luck plays a role, consistent diligence is what tips the scales in our favor over time. Running solid comps, managing projects tightly, and staying adaptable are the things we can control, and they make all the difference 

    @Bruce Woodruff

    User Stats

    63
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    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    Absolutely! Being in control of the contract, understanding the market you're buying in, and securing the right  price are the foundations of a solid deal. When those elements align, it gives you a buffer to handle the inevitable challenges that come with a fix and flip or hold.

    The entry price, especially, is such a game-changer—it can turn even a tricky project into a win if it’s favorable enough.

    You have to be able to put together all the moving parts, and make all the planets align! 

    thanks for the response 

    @V.G Jason

    User Stats

    19
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    21
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    Kaden Nguyen
    Pro Member
    • Real Estate Agent
    • Cleveland OH | Orlando, FL
    21
    Votes |
    19
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    Kaden Nguyen
    Pro Member
    • Real Estate Agent
    • Cleveland OH | Orlando, FL
    Replied

    Thank you for this post and all the great advices and insightful comments.

    I’ve only done a few flips since I focus more on BRRRRs and value-add for my rental portfolio. Like most have already stated, there will always be some type of curve ball in a flip, small or big. 

    So I always try to plan ahead, triple check my due diligence, and be VERY conservative with my underwriting. Plan for the worse and hope for the best.

  • Kaden Nguyen
  • User Stats

    113
    Posts
    142
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    Todor Ialamov
    • Real Estate Agent
    • Burlington MA
    142
    Votes |
    113
    Posts
    Todor Ialamov
    • Real Estate Agent
    • Burlington MA
    Replied

    Be conservative on budget and time. Add at least 15-20%

    Determining ARV is key.

    Be upfront with your contractors. Do not pay them in full before they close all their permits.

    Flipping multi families is less risky. You can always rent the units if marketing turns.

    Good luck!

    User Stats

    63
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    40
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    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    @Kaden Nguyen I completely agree, no matter how much experience we have, those curveballs are inevitable. I love your approach of being conservative with underwriting and planning for the worst while hoping for the best! It is important to know when something goes right we don’t have to overestimate ourselves too much and when something goes wrong we don’t have to underestimate ourselves! IT IS PART OF THE GAME 

    User Stats

    63
    Posts
    40
    Votes
    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    @Todor Ialamov 

    Being conservative on budget and time is so important, and I completely agree about the importance of ARV and managing contractors carefully. And yes flipping multi families is definitely less risky, but not as applicable and available to everyone as single families. Appreciate the insights!

    User Stats

    6
    Posts
    5
    Votes
    Annie Schrock
    Lender
    • Lender
    • Minneapolis, MN
    5
    Votes |
    6
    Posts
    Annie Schrock
    Lender
    • Lender
    • Minneapolis, MN
    Replied

    Every deal I've seen go bad is because of a bad contractor. Do your due diligence on the contractor before you use them! Under bidding, poor quality, not following timelines - those will all kill your project. Pick a good contractor and then manage them well! It makes all the difference!  

    User Stats

    63
    Posts
    40
    Votes
    David Martoyan
    • Wholesaler
    • Houston, TX
    40
    Votes |
    63
    Posts
    David Martoyan
    • Wholesaler
    • Houston, TX
    Replied

    @Annie Schrock thanks for the comment, definitely having the right contractor, always meeting your deadlines and doing full due diligence can make or break a deal!