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Updated over 7 years ago on . Most recent reply
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Flipped 5 houses in 8 months - but lost money on 2
I haven't posted in a while, so thought I'd share what we've been up to. We've flipped properties 3 through 7 since February and are in the process of buying two more to fix up. What value can I give to anyone that is reading this? Probably the most valuable lessons have been the ones that taught us we weren't invincible. We lost money on flips #4 & 5 and I have nobody to blame but myself. Here's a few things that went wrong with them: Flip # 4 was in Layton, Utah and everything seemed to be going good from the beginning. It was your pretty standard flip, but there were 4 things that we made mistakes on that ended up costing us: (a) Comps didn't support our ARV (1 comp did, but that was it), (b) contractor forgot to leave room for a fridge on the one wall – yikes, (3) garage door was too short to fit anything inside besides a car (Sorry, no Soccer Mom's) and (4) we didn't fix the terrible popcorn ceilings in front room and it was a huge eyesore as soon as you walked in. We ended up losing $3k on this house.
On to flip # 5: Flip 5 was in Ogden and we bought this one from a wholesaler. Where we got hurt on this one: (a) didn’t manage my contractor well enough – he worked pretty slowly and it took probably 3-4 weeks longer than it needed to, (b) did not get my initial budget correct – concrete work and unfinished basements did me in, and (c) it’s harder for my wife and I to flip further away (30 mins from our house). We lost $4k on this house.
Luckily, flips #6 and #7 got us back on track and we should get to the 6-figure mark for 2017. My 2018 goals are to flip 9 properties, wholesale 6, and buy 1 rental property. Take a look at some of the before and after pics.
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Be very wary of the flipping market. There are signs, such as a large increase in TV flipping shows, indicating that the market is at or almost at it's peek as it was in the early 2000s.
Every wanna be is rushing into flipping based on watching TV shows that are 2-3 years behind the market in many cases.
The market is about to adjust and flippers will be the hardest hit.
Be carful to insure your numbers are correct and concentrate on quick short time frame flips.