When I first got started flipping houses, it was just me and my husband. We were in our early twenties and we didn’t have too much to worry about financially. But we both wanted kids eventually and wanted to be able to afford time with them and a lifestyle that we thought they deserved. We’re both pretty handy around the house, and I have a crafty flair for decorating. We thought it would be a great fit for us, and we were right.
Flipping houses can be one of the most fun, interesting, and lucrative businesses you can go into. And if you have the right connections or you know the right places to look, it doesn’t take as much start-up capital as you might think.
It’s a rewarding career and it’s a growing one, in large part thanks to DIY networks featuring shows about home renovations.
But there is an uglier side to the business that doesn’t get shown too often on those shows. And it’s a fear that rests in the back of most home flippers’ minds: What if I go too far into the hole to fix it, and can’t so much as break even?
Chances are you’re eventually going to run into a house that just has too much wrong with it. Either you underestimate costs or overestimate abilities and you end up with a giant goose egg.
If you ever find yourself with a bad investment, I urge you to go to this website to learn more about how you can still make money on that poor buy. If you’re not in the Los Angeles area, that’s okay! There are many great firms across the country that will buy houses in any condition.
I’m not saying that you’ll absolutely get every penny back (though yes, sometimes you can, and even more rarely you can make some money on it, too), but it helps to recuperate some of the money that you’ve lost in the investment.
The most important thing you can do is to have a firm line. Know when to cut off the funds on a bad investment. Look at your profits vs expenses. If you have to aim for breaking even either way, don’t waste your time and money pouring it into a bad house.
Some of the best advice I’ve ever heard actually comes from stock market investors: Don’t let your losses run long. Cut them the moment they drop out of your comfort zone.
It can be daunting work, and knowing the difference between a project that is a loser or a diamond in the rough is something that only experience and personal choice can decide.
It might be a scary career choice from time to time, it might be gritty, you might find something gross.
But I haven’t regretted a single mistake that led me to the success I’ve found today. The time I get to spend with my husband and our beautiful daughters, the way we can honestly afford to lose and still be okay – man, there’s nothing like it!