Live-In Flip Burnout

17 Replies

Burnout is a real source of stress when in the middle of a live-in flip investment. Trust me, I know! We are in the middle of live in flip #3.  I have been thinking about tips I might be able to share to help other investors.  This is what I have experienced to be true.

1. Before the investment has begun, completely understand and accept that:

-Timelines will not always be perfect

-Budgets need to be reviewed regularly and expenses accurately tracked

- Obstacles WILL happen, but solutions WILL happen too with the right mindset/ attitude 

- Do not fall in love with a specific design if you choose to do something custom

2. When you move into the job-site (I mean home).

- Create a space to be completed as a high priority that is your own "nook". It can be a room or a space in a room- it just has to be organized and free from clutter.  It is meant to be a space that is yours and an escape from the construction chaos.  (In this current project- my space is the bathroom.  It has an amazing tub that allows for long Epsom salt soaks; which is helpful after a long day of remodeling and for a quiet place to allow me to think, dream, & decompress.

- Try your best to complete projects before moving on to the next.  Sometimes this is not possible due to supplies, contractors, dry times etc. However, if you jump from project to project the house feels like a disaster zone.  This means if you install a baseboard- caulk and paint it asap.  This will also help keep your motivation for the project going.  It is way harder to go back to an unfinished project once you have moved on to the next. Speaking from experience!

- Since you are living in the space take the time to clean up the job site. One benefit is living where you are working, but it can also be a down fall.  It isn't necessarily efficient to put all tools back in the garage or toolbox everyday.  Instead put all supplies and tools into the corner of the room rather than all over. Also consider investing in a moving tool cart for even easier transportation/ storage.

3. If you have kids, like I do, this is a FANTASTIC opportunity.  Get them involved!!! My boys love it. 

-They help with voting on colors and design- after all they are living there too.  

- Give them small projects to earn a little money.

- Take them to Home Depot and have them help with project estimates: Is this light fixture more or less expensive than that light fixture?

4. Lastly, ALWAYS think of the big picture!

- Know your WHY and trust the process!!

- Be ready for some self-consciousness when telling other non-investors, family, neighbors, and friends.  It can be challenging to always have to explain to others who do not understand your strategy. 

-Surround yourself with other real estate investors so you do not feel so alone- it helps combat the self-consciousness.

- Look forward to that future "payday"! You are working your strategy and it will pay off. I have 2 successful live in flips under my belt and the 3rd one is moving along nicely.

Ok this post could be a blog- but I do not have a blog so here it is.  

Have I forgot anything? Please add your tips and tricks below- I am always learning too.

Hope this helps and encourages other live-in flippers! Keep up the good work!

Hey @Kevin Ivey ! We are in the property for a minimum of 2 years so that are not taxed on the profits.  The last house we were in a lot longer since we had 2 kids and a job layoff during that time.  It was a good location and we had a good amount of appreciation in addition to the sweat equity we added. Thanks for the reply!

@Eric James  Thank you for the reply!  Yes factoring labor is an important element. Can you speak more to "risking your investment cash"? I am not exactly sure what you mean. Thanks!

Originally posted by @Julie Berks :

@Eric James Thank you for the reply!  Yes factoring labor is an important element. Can you speak more to "risking your investment cash"? I am not exactly sure what you mean. Thanks!

You could make contractor wages by getting a job as a contractor without risking any cash. When you flip a house you risk your own money. So, you need to make more on the flip than the cost of your labor because you are risking your money.

@Julie Berks , having lived through some home renovations: full kitchen remodel, full bath remodel of the only bath in the house, etc, my hat off to you for being able to do it over and over.  Managing a flip is enough stress.

From my perspective, it also is a trajetory of capital. The tax free gains are nice, and my wife and I are capitalizing on that now with the sale of our primary that was originally bought as a flip.  But we had it completed before moving in, so totally different scenario.  

I would look long and hard at how much you are really saving in taxes, and assuming the capital is available to deploy, it could be worth taking the tax hit on "traditional" flips to do more.  Financially you might come out ahead.  Of course this does not factor in most people's desires to improve their living space.  But I think of live-in flips as an investment, and home improvements as a lifestyle choice.

@Evan Polaski Thank you for your kind words. I could not agree more with your last statement- "Live-in Flips are an investment and home improvements are a lifestyle." So important to realize the difference. This strategy has been a great way to begin REI on a small scale, as my husband and I both have other jobs. It has given us a lot of confidence and resources. I see it as a stepping stone, but now we are focusing on buy and hold properties that need slightly more work than just a little paint, but not as in depth as our current project. I can't say that we will not do another live-in flip in the future, but it is time to move along in our education and find a strategy that will have a quicker timeline to profitability.

You and your family Rock!   Not many people have the dedication to live and work on a house at the same time.

Sacrifice is giving something up for something better.  I would always concentrate on making the house the most saleable to the most people!  Don't go to crazy with colors or tile or pictures, etc.  Try not to offend anyone with your up dates.  A nice flow of the house will always make a lady happy,  and of course the kitchen.

Try and make the house as open as possible when your ready to move it, just dressers, and beds, and very the least amount of furniture the better.

Way to go Julie and family, I miss Colorado!!!

Great post @Julie Berks . Very detailed. I'm looking to complete another fix and flip and then house hack but definitely enjoy learning about different RE strategies. 

Did you read any books prior to pursuing this strategy or did you jump in head first? I'd be interested to learn what resources you leveraged. 

@David Avery Well thank you! We appreciate your encouragement. Great tips for making a property ready to move. I agree- my style is more timeless rather than too trendy. 

@Cyle Harris I saw your most recent flip on your page. It looks great- so clean!  Way to go on taking action and learning from the process.  The first one is always the hardest; now you have more experience and knowledge to move on to the next one. Keep it up!

When I purchased our first live in flip, I was actually in the process of getting my real estate license in Louisiana, but then Hurricane Katrina devastated the state.  We were in Shreveport, so with questions about housing availability/demand we purchased our house earlier than planned with another agent.  However, I am positive that by going through the home buying process before taking the exams helped me tremendously with real world knowledge and not just book examples. 

I did not read any books specific to live-in flip, however I think @Mindy Jensen should make that her next book that she authors!  I kept with the common sense approach of buy a house that has been neglected in a great neighborhood and then do not over-improve. 

Fast forward to today and I read, listen to podcasts and surround myself with people who are active in REI.

Thanks for your reply and kind words! Reach out if you have any more questions about the live in flip strategy- I'm not an expert, but happy to listen and offer my experiences.

@Julie Berks This is a great informative post and would make an excellent blog post - you should start a blog!  I had a similar experience last year and I completely agree that you need a space that is not being touched by the renovation, otherwise it truthfully feels like you're living in a disaster zone.  

Having a firm SOW is crucial to ensure the project can stay close to being on time and on budget.

Additionally, your point on the why is spot on.  After all, if you don't know the why, then what's the point?  Even if the why has changed and you decided you will no longer pursue live in flips, you've established that while accumulating a wealth of knowledge on the process (whether you wanted to learn it or not).  

@Faraz Tariq Thank you! Yes I think a person's "Why" should be fairly consistent, but life events happen and that calls for clarification and realignment sometimes.

@Julie Berks . This post is awesome! Many people talk about doing a live in flip without understanding all the pros and cons of this real estate strategy. Mindset is just as important as real estate knowledge. Thank you!

@Jeffrey Donis Your kind words are appreciated! Thank you.  I just checked out your bio and WOW- it looks like you and your brothers are crushing it.  I have started to follow along on your IG and podcast.