{"id":119996,"date":"2019-12-05T12:00:58","date_gmt":"2019-12-05T19:00:58","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=119996"},"modified":"2023-03-20T22:55:11","modified_gmt":"2023-03-21T04:55:11","slug":"10-lessons-learned-from-5-years-flipping","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/10-lessons-learned-from-5-years-flipping","title":{"rendered":"10 Lessons Learned From 5 Years of Flipping Houses"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC9626451802&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n<p><span style=\"font-weight: 400;\">Whenever you hit major milestones in your business, it\u2019s hard not to look back at where you started and how much you have grown along your journey. While we already do weekly and monthly update meetings and then a yearly review, when we hit the five-year mark of our <a href=\"https:\/\/www.biggerpockets.com\/blog\/2014\/01\/07\/flipping-houses\/\" target=\"_blank\" rel=\"noopener noreferrer\">flipping business<\/a>, I decided to take a look back at our entire portfolio. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Even with all of our construction experience and after reading dozens of books and articles on the subject, we had no idea what we didn\u2019t know. To this day, we learn something new with every house we buy. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">With that in mind, I made a list of lessons learned over the years that have now become part of our <a href=\"https:\/\/www.biggerpockets.com\/blog\/2015\/07\/06\/ultimate-guide-systems-outsourcing-real-estate\/\" target=\"_blank\" rel=\"noopener noreferrer\">systems<\/a>. Below are 10 of those lessons that I think could help others when they are <a href=\"https:\/\/www.biggerpockets.com\/guides\/how-to-flip-houses\" target=\"_blank\">flipping houses<\/a>.<\/span><\/p>\n<h2>10 Tips for Fix &amp; Flippers From a House Flipping Veteran<\/h2>\n<h3><span style=\"font-weight: 400;\">1. Mind the Double Line<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">When we read the feedback on a showing from one of our houses, all that the agent said was \u201cNot Interested. Double Line.\u201d At first, we had no idea what she was talking about; then, we realized that the road in front of the house had a double yellow divider line.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In our area, roads in neighborhoods have no divider line, roads in residential areas have single divider lines, and busier roads have double divider lines. This agent\u2019s \u201cdouble line\u201d comment was informing us that her client would never buy a house on a busy road.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In our experience, sale prices can be affected by approximately 10 percent when they are located on busy roads. Further, it drastically limits your pool of buyers. To this effect, whenever we buy houses on busy roads, we factor in a lower ARV and a longer hold.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">2. The Profit Is in the Follow-Up<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">In our second year of business, we acquired a property solely due to our follow-up. According to the listing, the house had a failed septic and needed stucco remediation. Through our follow-up, we found out that the homeowners replaced the septic and remediated the stucco after the property was initially listed and our original offer was submitted.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Fortunately for us, the listing was never updated, nor was the property\u2019s price adjusted. We increased our offer by a few thousand dollars, and we ended up getting the house.\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-108817\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/talking-on-cell-phone.jpg\" alt=\"woman in maroon shirt and yellow sweater talking on a cell phone while going over notes on a notepad\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/talking-on-cell-phone.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/talking-on-cell-phone-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h3><span style=\"font-weight: 400;\">3. No Looky Loos<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">We no longer let future buyers in our houses before it\u2019s ready. Ever. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is always a story as to why they need to see it early, and it is always convincing. The truth is that, most of the time, it is just an agent trying to show their clients that they are working extra hard by finding them houses that aren\u2019t even listed yet. Not only is it a liability, but also buyers looking for a renovated home do not have the vision for the completed project that you do.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"> We have not had a single early looker translate into a sale. In fact, we even had a buyer look early, say no, then come back when it was completed and buy the house. People do not know what they want until you show it to them.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">4. Howdy Neighbor<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Good or bad, neighbors can have a huge impact on your project. We always introduce ourselves when we buy a house and give all the neighbors our contact information. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Everyone has heard plenty of neighbor horror stories, but they can also help you out. We had one neighbor spot a potential theft and call the police at 2 a.m. Because of that neighbor, nothing was taken. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">We redesigned our original layout to mirror another house on the block when a neighbor showed us their recent renovation. When we purchased a twin house, we asked the neighbor if they were interested in painting their exterior, as it would be cheaper if we did it together. They said yes\u2014even though we were prepared to pay for it for them. \ud83d\ude42 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">A little friendliness can go a long way.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">5. Zestiwrong<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While Zillow can be a great tool for quick lookups and they are getting better every day, you can\u2019t always rely on their Zestimate. We bought a house for $235K, and Zillow valued it just over $300K. After our renovation, the house sold in less than a week for over $540K.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Sometimes the best deals are found when you are paying attention to the surrounding market and catch something before Zillow does.<\/span><\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/zillow-zestimate-home-valuation-tool-accuracy\" target=\"_blank\" rel=\"noopener noreferrer\">How Accurate Are Zillow Zestimates? I Tested the Home Valuation Tool Post-Upgrade<\/a><\/em><\/p>\n<h3><span style=\"font-weight: 400;\">6. Inspect This<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Like most flippers, I am not a huge fan of inspectors. It is a crazy, unregulated profession with absolutely no accountability. That being said, they are just trying to do their job (or seem like it) and get paid.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The more items they are able to put in the report, the more it seems like they did a good job. No one would accept a blank inspection report that says the house is perfect. So, why make the inspector work harder than they have to to find problems?\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">We like to leave a bunch of unfinished, easy-to-fix items for the inspector to find. We especially like code violations that no home buyer would notice but are super easy to fix. Inspectors LOVE their code violations; it makes them feel smart. Some missing caulk in the bathroom, no anti-tip device on the stove\u2014anything that takes a couple minutes to complete.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Want to take it one step further? We even leave a list of the items we have yet to complete for the inspector, so they can include them on their report.\u00a0\u00a0<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-106768\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/doe-diligence.jpg\" alt=\"magnifying glass looking into wooden blocks shaped like houses\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/doe-diligence.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/01\/doe-diligence-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h3><span style=\"font-weight: 400;\">7. Beware of Shiny Objects<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It is always safer to stick to the original plan. I know that earlier I mentioned we changed the layout of a house after talking to the neighbor. But nine times out of 10, when you deviate, it does not end well. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you bought the house and did not plan on finishing the basement, then do not decide to do it halfway through. Making changes usually ends up costing more money and delays the overall project. You will not always get that extra premium you think you will, and a cheaper house sells quicker anyway.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">8. Always Submit<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Here is where your agent is going to hate you, so you might have to get your license after this. No matter how ridiculous the price, always submit the offer. <\/span>I looked at a house last week that was $350K; I offered $135.<\/p>\n<p>Years ago, we went to see a house that was listed for $499K. It was outdated but in decent shape, so an end-buyer could have easily moved right in. It was only on the market a week, so we debated whether it was worth even making an offer. But the listing agent insisted. We offered $315K, and they accepted.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/real-estate-tips-submitting-offers\" target=\"_blank\" rel=\"noopener noreferrer\">6 Effective Tips to Ensure Your Offer Gets Accepted<\/a><\/em><\/p>\n<h3><span style=\"font-weight: 400;\">9. Talk the Talk<\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.biggerpockets.com\/users\/brandonatbp\" target=\"_blank\" rel=\"noopener noreferrer\">Brandon Turner<\/a> preaches to always tell people what you do, but I will take this a step further: Make yourself memorable. I have an advantage in that department, since there are not many young women in the construction field\u2014especially who partnered with their father.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">We also branded our company with a catchy name, HouseItLook, so even the company name is explicit. We once received a lead on a property that translated into a purchase, just because someone remembered our name from a previous transaction.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You will be shocked how many people know somebody who knows somebody who just inherited a property. If you can hand them your card (you have one right?) and your card sends them to your website (you have one of those, too, right?), you might just be able to sneak to the top of the line before those pesky agent sharks start circling.\u00a0\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">10. Seasonal Depression<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">When we first started out, we understood that markets were slower during the winter, but we did not grasp how much of a factor it is. In our area, school districts are paramount, so most families are looking to be in their new house by summer. That coupled with the beginning of nice weather, springtime usually sees the most buying activity. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">What we did not understand was the other negative factors that wintertime magnifies. A steep driveway will seem even steeper in the winter (as people will think of plowing snow or driving up it while icy). A next-door neighbor will seem a little bit closer with no leaves on the trees, and a highway that seemed miles away in summertime is all of a sudden much more noticeable. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you can help it, try and get your house on the market before all of these issues pop up. But if you can\u2019t help it, plan for a longer hold and more price drops.\u00a0<\/span><\/p>\n<h2>The Bottom Line<\/h2>\n<p><span style=\"font-weight: 400;\">This list is just scratching the surface of all the \u201cgrowth opportunities\u201d we have had over the years. Every day we are learning something new, and our business is better off for it. The biggest challenge we face today is not overlooking our past experiences in order to make the numbers on a deal work.\u00a0 <\/span><\/p>\n<p><span style=\"font-weight: 400;\">As the market bubbles up and deals become more scarce, it is more important than ever to continue learning from our past so that we are still in business in the future!<\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/biggerpockets-business-podcast\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-119124\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/business-podcast-ad-for-blog.jpg\" alt=\"\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/business-podcast-ad-for-blog.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/business-podcast-ad-for-blog-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/business-podcast-ad-for-blog-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em>Do you have any additional nuggets of wisdom to add? <\/em><\/p>\n<p><strong>Share below!<\/strong><\/p>","protected":false},"excerpt":{"rendered":"<p>Despite having experience and gaining knowledge by reading books and articles, even the best real estate investors sometimes don&#8217;t know what they don&#8217;t know. After several years in the business, we still learn something new with every house we buy. Here are a few lessons that may help you as a house flipper.<\/p>\n","protected":false},"author":65623,"featured_media":120066,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5525],"tags":[],"class_list":["post-119996","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-flipping-houses"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/119996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/65623"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=119996"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/119996\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/120066"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=119996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=119996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=119996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}