7 Things I Desperately Wish I Had Known When I Started Flipping Houses

7 Things I Desperately Wish I Had Known When I Started Flipping Houses

5 min read
Brandon Turner

Brandon Turner is an active real estate investor, entrepreneur, writer, and podcaster. He is a nationally recognized leader in the real estate education space and has taught millions of people how to find, finance, and manage real estate investments.

Experience
Brandon began buying rental properties and flipping houses at the age of 21. He started with a single family home, where he rented out the bedrooms, but quickly moved on to a duplex, where he lived in half and rented out the other half.

From there, Brandon began buying both single family and multifamily rental properties, as well as fix and flipping single family homes in Washington state. Later, he expanded to larger apartments and mobile home parks across the country.

Today, Brandon is the managing member at Open Door Capital, where he raises money to purchase and turn around large mobile home parks and apartment complexes. He owns nearly 300 units across four states.

In addition to real estate investing experience, Brandon is also a best-selling author, having published four full-length non-fiction books, two e-books, and two personal development daily success journals. He has sold more than 400,000 books worldwide. His top-selling title, The Book on Rental Property Investing, is consistently ranked in the top 50 of all business books in the world on Amazon.com, having also garnered nearly 700 five-star reviews on the Amazon platform.

In addition to books, Brandon also publishes regular audio and video content that reaches millions each year. His videos on YouTube have been watched cumulatively more than 10,000,000 times, and the podcast he hosts weekly, the BiggerPockets Podcast, is the top-ranked real estate podcast in the world, with more than 75,000,000 downloads over 350 unique episodes. The show also has over 10,000 five-star reviews in iTunes and is consistently in the top 10 of all business podcasts on iTunes.

A life-long adventurer, Brandon (along with Heather and daughter Rosie and son Wilder) spends his time surfing, snorkeling, hiking, and swimming in the ocean near his home in Maui, Hawaii.

Press
Brandon’s writing has been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media.

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YouTube
Instagram @beardybrandon
Open Door Capital

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When I first decided to flip houses, I was a bit arrogant.

I thought, “How hard could this really be? I mean, it’s just like the TV shows, right?”

Wrong.

I’ve spent the last decade buying both rental properties and doing house flipping, and I’ve learned a LOT. Sometimes I wish I could go back and give myself some advice. But I can’t. However, I can do the next best thing: I can share that advice with you.

Therefore, in this post I give you seven things I desperately wish I had known when I started flipping houses.

Single Family Rental House

**Hey you: Are you interested in house flipping? If so, don’t miss this week’s BiggerPockets Webinar titled, “How to Analyze a Fix and Flip Deal (And Avoid Getting Burned!)” Why? Because (as you’ll see in this post) knowing how to do the math is one of the most important steps in ensuring you’ll make a big profit. Sign up now to hold your spot! OK, back to the post!

1. The Flip Doesn’t Begin When You Buy It

The first thing I wish I had known when I started flipping houses is that work doesn’t begin when you buy the property. It actually starts before that.

No, I’m not talking about breaking into the house and removing walls.

I’m talking about the prep work.

You see, what most people do (and I did for many years) is wait until the day after closing and then start planning for the flip.

Sure, that works, but you are missing out on some valuable time that could help your entire flip move faster!

During this “due diligence process,” you can use the time to line up contractors, create an incredibly detailed scope of work, open up a checking account for the property, pick out materials (though I would wait to actually buy them until closing), and more.

house-flipping-report-1

2. The Scope of Work is Unbelievably Important

Perhaps the most important document you’ll use during the entire flip process is known as the “scope of work.”

Essentially, this is a detailed list of every single item that needs to be rehabbed in the home.

When I started flipping houses, I would jot down some notes as to what needed to be done — but it was far from complete.

Related: The 7 Commandments of Choosing a Profitable House to Flip

I figured, “Eh, what’s the purpose of getting too detailed? Whatever problems we find are going to come up anyway, and I’ll just have to fix them. So who cares if they are written down? It’s not a big deal, right?”

Wrong! It’s a huge deal!

Because the more detailed your scope of work is, the more smooth and on-budget your entire flip will be. When you know everything about the property, you can get more accurate estimates from contractors, schedule people at the right times, reduce the number of “change orders” the contractors will try to charge you for, and reduce your stress considerably.

The scope of work is like a road map — it’s easier to follow when it’s detailed.

3. Cheap Doesn’t Mean Good Deal

Many of the houses I have flipped I should not have.

Because I bought them because they were cheap, not because they were a good deal.

There is a difference — and understanding that difference is the thing that separates the winners from the losers in house flipping.

Some cheap houses are cheap for a reason. Perhaps it’s in a bad neighborhood. Perhaps it needs too much work. Perhaps there are environmental reasons for its price, such as lead-based paint or asbestos.

Whatever the reason, remember: Cheap doesn’t necessarily mean it’s a good deal.

4. You Make Your Money When You Buy

Once you’ve purchased a house, your profit is already capped at a certain point, and it’s not going any higher. Therefore, if you pay too much for a property going in, it’s unlikely you’ll ever get out with the profit you wanted.

You can’t magically make the house worth more than it’s going to be worth. The after repair value isn’t going to change no matter how cute the paint is.

Therefore, always do your math CAREFULLY when buying a flip. Never buy on emotion, but buy because the math shows you are going to make a profit.

flipping-tips

5. Dealing With Contractors is the Hardest Part

I firmly believe the most difficult part of flipping is dealing with the contractors.

You might find a great deal, might have incredible financing, and it might be in a great neighborhood.

But if you have horrible contractors or simply don’t manage your contractors correctly, you’ll struggle and maybe even lose money.

Therefore, don’t think of “finding a contractor” as a quick and easy task. Put an incredible amount of time, effort, and due diligence into hiring the best contractors.

The more work you do up front finding and vetting contractors, the better your flip will go.

For more on my best tips for finding contractors, be sure to check out my post, “The Ultimate Guide to Finding an Incredible Contractor.”

6. It’s More Expensive Than You Think to Rehab a Property

One of the most painful lessons I’ve had to learn over and over and over in my business is this: It’s far more expensive to rehab a house than you might initially think.

Related: 5 Smart Ways to Reduce Your Fix and Flip Expenses

This is especially true for people who are “handy.”

I mean, I know that it would take me about four hours to paint a big room, including trim. So when I think about hiring a contractor, I think “OK, so if they are around $30 an hour, then I should probably budget around $120 for paint.”

Then I’m shocked when all the bids are north of $400! Why? There are a lot of reasons, including:

  • Me being optimistic on how long it really takes to do a task
  • Me believing good contractors ever work for $30 an hour
  • Not counting for the contractor’s “overhead”
  • Greedy contractors

Now, when I estimate how much work something takes to get done, I always overestimate everything — and then add even more.

I’d rather estimate too high than underestimate and lose money.

7. Flipping Houses is Not Easy — But It’s So Worth It

I first got into house flipping because of the TV shows.

It just looked so fun and easy. And it IS fun — but it definitely ain’t easy!

Flipping houses successfully requires a lot of patience, practice, skills, negotiation, dealing with people, budgeting, guiding, managing, and more. It’s a lot of work!

Honestly, in the beginning, had I known the truth about how much work it would be, I don’t know if I would have had the guts to do it.

But I’m so glad I did.

Every flip is unique, but each time I get better. Each time I learn more, and my “mental toolbox” is filled with more skills, more ideas, and more strategies for reducing my stress and improving the process.

If you are looking to get into house flipping, don’t let the fear of the unknown stop you. But don’t walk in blindly either. Learn all you can, ask a lot of questions, and find out about the mistakes others have made.

Then, go out there and crush it!

[Oh, and come join me for the next BiggerPockets Webinar, “How to Analyze a Fix and Flip Deal (And Avoid Getting Burned)“!)]

Flippers: What harsh lessons have you learned through your flipping experiences?

Let me know with a comment!