No, really. Why do you want to fix and flip houses?
Is it because you saw a reality show and decided “Hey, that looks easy, I can do that”?
Or perhaps there’s a vacant house on your street badly in need of repair. You think to yourself “if only I could find the owner of that property, I could fix it up and make a ton of money.”
Maybe you’re in love with the idea of finding an ugly, outdated eyesore and turning it into the neighborhood gem. The process of transformation excites you.
Regardless of what’s calling you, the fix and flip business isn’t easy. That itch you have right now will fade away quickly if you’re not patient, educated, organized, motivated and passionate.
Can you make a lot of money fixing and flipping houses? Absolutely. But you know what? There are thousands of ways to make a lot of money, ways that are far less time and capital intensive. At least part of your decision to start fixing and flipping is likely financially driven, most entrepreneurial endeavors are. However, to succeed you’ll need more than just a lustful craving for cash.
There are some really dreadful, mundane and monotonous tasks you’ll be required to perform if you’re going to get into this business, tasks that have virtually nothing to do with fixing and flipping houses. Just this morning, for example, I spent three hours at my desk sorting and opening utility and tax bills, which was followed by paying those bills and making entries into QuickBooks.
Then the phone started ringing. We have a closing scheduled at the end of the week and the buyer’s lender requires a lien waiver for a small repair. After 30 minutes on the phone chasing paper I finally found the document and was free to focus on actual real estate related duties.
Time and people management skills are essential. Your actual knowledge of the market, trends and property values are important too. But without the ability to effectively communicate and enforce deadlines and budget goals with your team of contractors the probability of failure is high. Unfortunately, this is something you likely won’t learn from that real estate investment guru at the weekend foreclosure boot camp.
So by now you may be wondering, why do I like to fix and flip houses? After all, I’ve painted a pretty dreary picture of the industry. The truth is, while my distaste for the administrative drudgery is real, it does not trump my passion for finding and transforming houses.
I love it.
I find it extremely satisfying to clean up neighborhoods and increase property values. Walking through a run-down, neglected property in need of updating and visualizing a modern, fully remodeled masterpiece doesn’t come easy for most people. But that’s what I do. And the fact that I can reach my financial goals more quickly than working a 9-5 job makes me love it even more.
I’ve miscalculated many times on individual deals, but my enthusiasm never ceases. I learn from my mistakes and keep moving forward. That’s why I’m convinced a lack of knowledge or capital is not an excuse for failure.
Your passion, or lack of passion, will be the reason you succeed or fail at fixing and flipping houses. Nothing else.