What's the biggest lesson you learned from flipping houses?

[Katlynn Teague]

Good Morning BP!

What's the biggest lesson you learned from flipping houses? Do you know use this lesson as a tool in your new flips?

[Scott E.]

I can't sum it up into 1 single lesson. Here's a handful of lessons I've learned, in no particular order:

1. Location is more important than anything else

2. The project will always cost more than your contractor says it will

3. The project will always take longer than your contractor says it will

4. Hard money is very expensive

5. Hire a designer

6. Get a permit when you should get a permit

7. Stage every house before selling

8. Always have a back up plan

[Bob Stevens]

Quote from @Katlynn Teague:

Good Morning BP!

What's the biggest lesson you learned from flipping houses? Do you know use this lesson as a tool in your new flips?

 ALWAYS buy right, and ALWAYS assume your reno will be more then you expect, 

[William Harvey]

Buy right. You absolutely make money when you buy, not when you sell. The way we put this in practice is buy being extremely conservative with our ARV calculation when we analyze the deal. That's vitally important, especially in this current market we are in.

[Katlynn Teague]

Quote from @Scott E.:

I can't sum it up into 1 single lesson. Here's a handful of lessons I've learned, in no particular order:

1. Location is more important than anything else

2. The project will always cost more than your contractor says it will

3. The project will always take longer than your contractor says it will

4. Hard money is very expensive

5. Hire a designer

6. Get a permit when you should get a permit

7. Stage every house before selling

8. Always have a back up plan

You're absolutely right!

[Marty Boardman]

There are some problems that price can't fix. I've looked at houses that the owner could have given me for free that still wouldn't make a profit.

[Lindsey Johnson]

Run your numbers conservatively and make sure it would cash flow/break even as a LTR if you had to keep it!

[Mose Gebremeskel]

Quote from @Scott E.:

I can't sum it up into 1 single lesson. Here's a handful of lessons I've learned, in no particular order:

1. Location is more important than anything else

2. The project will always cost more than your contractor says it will

3. The project will always take longer than your contractor says it will

4. Hard money is very expensive

5. Hire a designer

6. Get a permit when you should get a permit

7. Stage every house before selling

8. Always have a back up plan

 Yes very true!

[Dave Spooner]

Making sure you have enough money for the reno. Never can save enough for that. And the biggest thing is being conservative when running your numbers.

[Chad Shultz]

Katlynn,

It seems many folks, in my opinion, make a lot of errors by assuming others will follow through.  There are many good tradesmen and tradeswomen out there, but a large number of them work from dollar to dollar.  When possible, most of them will line up many projects, to make sure the dollars are coming in as a constant flow, but they don't usually have the time to adequately do any of those projects.  I would say the single largest lesson is not to trust your end result in someone else's hands, especially when that person's result is not tied to the overall performance of your project.  Think about it:  Most contractors will get paid by the job or the hour.  They don't care if you make a profit, or what that profit is.  If you want to ensure maximum profits, fewer problems and a result up to your required standards, you must oversee what is being done.

[Steve Vaughan]

Quote from @Katlynn Teague:

Good Morning BP!

What's the biggest lesson you learned from flipping houses? Do you know use this lesson as a tool in your new flips?

I learned they are horrible.  Cost and time overruns are a given. 

But at least indigestion takes over your life and high transaction costs and taxes at ordinary income rates await. 

[Dianna Ivanov]

@Scott E.

All very true!

I think for me, the key was learning

-I make my money when I buy.

-Black and white bottom line

-No emotion.

-Factor in all the things that could go wrong -if they do I’m prepared if they don’t I’m ahead of the game.

[Katlynn Teague]

Thank you so much to everyone who took time out of their day to answer my question. You all gave me excellent advice to be aware of and implement. Thank you so much!

[Eliott Elias]

It is draining and takes up a lot of time. 

[Steve Vaughan]

Quote from @Katlynn Teague:

What's the biggest lesson you learned from flipping houses? Do you know use this lesson as a tool in your new flips?

Here's a new post today.
Permit delays of 6 months.  Hard money loan deadline looming...
https://www.biggerpockets.com/...

[Patrick Prunty]

1. the importance of good accounting records

2. its much harder and more time consuming than you expect

3. no matter how detailed your scope/budget, expect the job to cost more 

4. don't flip properties that couldn't be kept as rentals, i.e. refinance out of hard money and hold (for a better market, or the price you want)

5. flipping requires capital, don't expect that your hard money covers everything (it doesn't, and you don't want to be caught short)

[Todd Drake]

Spec finishes to the hood not to your personal taste!

Classic newbie mistake.

The neighbors loved us!