I would like to learn from your mistakes.

8 Replies

Hello Everyone.

This is to all my investors, I would like to learn from all of your mistakes. I'm ready to do my first flip(auction homes, pre foreclosures, foreclosures homes) however, I want to gain as much knowledge as I can to become successful in the field. I know I have come to the right place for guidance. So, I would like to hear from your pass experiences. I want to know what to be ready for starting from the buy, to rehab, holding cost, realtor cost, Etc. I really appreciate your feedback. I want to thank all of my BP family for any info. 

Thanks again and hope to start my first flip soon.

work to develop that discipline to walk away from a bad or mediocre deal.  This also requires thorough number crunching and emotional detachment.

Share your first deals here for feedback.

1. get permits

2. pay your contractors against the budget to keep all reconciled and on budget

3. put in 1 month buffer internally that the contractors do not know about

4. always have backup contractors

Always remember that your profit is made during the purchase so negotiate wisely. Spend as much time with your subs as possible to learn their trade so you can identify problems when you are looking at other properties. Accept the you will make mistakes and learn from them and have confidence that you will not make the same mistake again. Most importantly...don’t do it for the money. Do it for fun. If your enjoying yourself everything else will fall into place.

There is a easy way to calculate for the unknowns. I see people on tv run across that problem then stuck trying to cut costs somewhere else to make up for it. Called fudge factor, 3% of total cost. I have always been under but gv me cushion when going to lenders, they love it..

Agreed to have multiple contractors back up.

From the landlord side, cannot have soft heart.
Once a Tenant is late on rent for 3 times or more, send them 30 days move-out notice immediately, don’t keep them for whatever reason. They may become trouble sooner or later.

Don’t sign long lease.
Sign short term lease, so you are ready to kick out the bad apples tenants anytime by give them a 30-days move out notice.

Originally posted by @Rick Zink :

Always remember that your profit is made during the purchase so negotiate wisely. 

Most importantly...don’t do it for the money. Do it for fun. If your enjoying yourself everything else will fall into place.

 This saying is common and was certainly very accurate in the past, however, in today’s market, not exactly. While negotiating the best deal is important, it is no easy task in a very competitive sellers market. Most of my profit these days is derived from “creating the spread” rather than getting it at purchase. I often must pay retail to get a deal and then create my profits by maximizing the value through additions and maximizing the buildability of the lot size.

As to the second comment, I got into this business because it was interesting to me and I felt I could be successful at it, thus enjoy it, but ultimately, I do it for the money and the fact that there is no ceiling to how much I can make unlike most W2 incomes or even other self employed incomes.

I have a ton of mistakes from my first flip I could go on about...

One personal lesson that stands out: After dealing with countless flakes, scrubs, and big talkers, I learned not to wait on potential "buyers" before taking any necessary action to sell my house. I had shoppers who "loved" the house and were so "serious" about making an offer, blah blah... I held off on lowering my asking price a couple of times because I had these people in the wings who just needed to get a cosigner, or get a pre-approval, etc... Money talks. Unless you have a cold hard contract or money in hand, don't wait up for anyone. You're more likely to waste precious time and drain your funds in holding costs than for the average tire-kicker to follow through. Focus on getting your house sold ASAP.