Painful First Flip Turned Flop. Any Advice??

[Mathew Pezon]

Dear BP Community, It all looked so good on paper, and then when the project started things did not go according to plan... I'm dealing with a painful first flip that I still haven't sold yet but purchased in October. Pick an aspect of the flip and it went wrong: over schedule, over budget, manpower issues with contractors jumping off the job, design flaws, payment terms, forgot to fill the oil tank over the winter and ruined the radiators and downstairs flooring... The list goes on and on. Although it's a painful experience, there was a lot to be learned here. My rental portfolio is doing well, and my job will help me slowly recover. I'm wondering if there are any other first time flippers in the Lehigh Valley, Allentown, Bethlehem, or Easton who may have experienced something similar, a "battle scar" to share. What have you learned through your failure? Did you try to flip again? What was the most important lesson you learned from your first flip? How did you pull through the challenge and continue investing in RE? Thanks!

[Nick S.]

Matt, 

Thanks for sharing your post - I'm sure it took a lot to write down and admit failure. 

I have two similar situations on flips. My first two lost money both times and once it was really big (25%). I was inexperienced, listened to the wrong people for advice, and was too excited without enough due diligence because it also "looked so good on paper". On top of that, the one house was on the market for 3 weeks and was broken in to and they stole all of the appliances, FURNACE, toilets, AC unit, and other random things. I learned that vacant property insurance does not cover theft of materials inside the home. That alone cost 12k. It was awful, but I made it through the experience and learned a TON.

Now, I am thankful for the experience because of how much I learned and how strong I now am because of the loss. It happened for me to get better and become the investor I am today.

Stay focused. 

Nick