5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, & Selling Properties

Recently, I had the opportunity to be part of an article series with Authority Magazine about house flipping. I thought I’d share a little bit below from that interview series on what I consider to be some of the most common mistakes I’ve witnessed when other people try to flip homes. I am copying and pasting directly from the article. If you’d like to read the entire *5 Things* interview, please click HERE.

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Interview by Jason Hartman

What are the most common mistakes you have seen other people make when they try their own hand at house flipping? Can you share any stories? From your experience, what can be done to avoid those errors?

  1. People pay too much on the purchase. We make our money on the buy. It’s easy to get emotionally attached to a house after making an offer. In order to prevent this we stick to a simple formula that dictates the maximum amount we can offer for any property. We try to keep our numbers conservative — lower on the after repair value (ie market value) and higher on the repair budget. If the house happens to sell for more, great! If not, we have a big enough buffer built in that we will make money either way.
  2. Over-renovating is another mistake — spending too much on the rehab or customizing the house too much. I’ve seen this with some well-known designers who get into house flipping. They have incredible design sense, but they’re used to working with homeowners who want very specific things. When we flip a house, we have to renovate in such a way that it appeals to the maximum amount of buyers in any given demographic. That means getting creative in certain areas but, for the most part, sticking to the status quo. To keep ourselves in check, we look at what sold recently in our price range in close by neighborhoods and renovate similarly.
  3. People put too much trust in their contractors. You really have to work with a contractor multiple times and establish a strong relationship with them before turning over the reins. Micromanaging isn’t fun. And the reason we hire a general contractor in the first place is so that we don’t have to. Unless your contractor comes highly recommended by word of mouth, from someone you know well and respect, keep the leash short. When rehabbing a house we create a payment schedule with milestones. This includes certain tasks that need to be accomplished by a target date. Then payment is rendered for those tasks. Rewarding your contractors along the way keeps them inspired, motivated, and honest.

What common mistakes have you seen? Leave a comment below!


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