Love What You Do — If you do anything just for the money you will eventually burn out. You need to have a passion for the work you do, otherwise it will forever be just a job. Becoming successful is not so much a challenge as it is to stay successful. Things will get tough, and you need to be able to rely on that passion for doing it to keep on doing it.
Shows like Flip or Flop and Fixer Upper with Chip and Joanna Gaines have really glamorized the creativity and enjoyment that comes with buying a rundown home, fixing it, and then selling it for a profit. Some amateurs have ventured into this industry and have made a lucrative career out of it. But others, particularly when a market is stagnant, have lost their shirts. As a part of my series about the ‘5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties’, I had the pleasure of interviewing Jerryll Noorden & Jessica Roman We Buy Houses In Connecticut.
Jess and Jerryll are a successful house flipping duo, that met through a dating app, bound by a passion for house flipping and their love for each other. Jerryll, a successful scientist, engineer and researcher in the fields of robotic exoskeletons and humanoids having worked with institutions like NASA, IHMC, and Italy’s prestigious IIT, and Jess, a jack of all trades, contractor, and mom of 2, left their careers behind to pursue their dream and life passion of flipping houses. Their next goal, hosting their own house flipping show on TV!
Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?
Of course, you are very welcome. I (Jerryll) came to the US as an international student. When I was finally ready to move off campus (dorms) I rented a 3-bedroom house and rented the other 2 rooms out. They paid my rent for me! I was a real estate investor before I even knew what that meant!
After college, a (then) small research institution in the field of robotics hired me to be part of their team. It was a research institution dealing with human and machine cognition. I was in charge of a robotic exoskeleton project to help paraplegic people walk again.
I decided it was time to buy a house. I knew, from my student off-campus days, that the more house I could buy, the cheaper it would be because the more rooms the house would have, the more rooms I could rent out. I bought the biggest house I could afford, rented out 4 rooms, and paid the mortgage with their rent. I even had some money left over. It was great!
As we finished the design and build of this robotic suit (think Ironman), we had to find paraplegic users for testing. We found a willing (eager) participant, and it worked. He walked again for the first time after years confined to a wheelchair! We formed a strong bond.
Although the project’s huge success… we were denied further funding. It was heartbreaking to see the expression of defeat on his face. This changed my entire life! I was sick and tired of being dependent on someone else to do what I want to do. It suddenly dawned on me that I was spending 80+% of my life making someone else’s dreams come true. More than 80% of my time is spend inside a building staring at a computer screen, taking orders, so that someone further up the ladder gets their goals realized at the expense of mine, so I quit!
It was silly, it was dumb, it was stupid, and it was the best thing I ever did, period! It was scary though. Usually, people start their side hustle first and only when it becomes successful do they quit their real job. I realized that I had been making passive income all this time I rented out my rooms, so I wanted to explore this further. Do or die, I am going to become a real estate investor. Now all I had to do was figure out how to start…
This lead to my business, which I conveniently named We Buy Houses In Connecticut. It was no walk in the park and it was hard to get established. Then I met Jess. Things immediately fell into place and we blew up! We then started a successful real estate investing SEO company which I conveniently called SEO For Real Estate Investors, and the rest is history!
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far?
I found my best friend and life partner through the fact I flip houses. Here I was, on a popular online dating website, browsing the lady profiles when I saw her. Man was she was pretty! My heart started racing when I read on her profile that her life-goal was to be a house flipper to have her own HGTV flipping show. I stumbled all over myself to write her a message saying: “Hey, I have a real estate investing business and I flip houses, want to have tea?”. Of course, I used whatever lure I got to win a date with her, and obviously I had an amazing lure!
She accepted my invite! Whaaaaat!!! All she saw was “house flipping” while all I saw was “that face”! One month later I moved in with her (I was living in one of my flips… as I said, I had a really rough start getting into real estate investing without a job, and without money). Ever since we teamed up, things just worked for us. So, literally, my secret to success in real estate, is Jess!
Can you share the lesson or take away you took out of that story?
You can’t plan for everything and life truly has its way of throwing really weird, unexpected curveballs at you. Being conscious and aware (consciously awake) is a big deal. You need to really, not just “see” these “opportunities”, but acknowledge them and use them to improve your situation and align these random events with the path that gets your goals accomplished. Heck sometimes these curveballs even change your priorities and goals all together!
Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?
“Life steers you along your path of least resistance. Understanding the meaning of that sentence is the difference between people that end up where life took them and people that ended up where they took their life!” -Jerryll Noorden
When I (Jerryll) was working at my (fancy) robotics job after college, I was constantly bitter, complaining how unfair things were, new hires got paid more, nothing is fair, I deserve and am entitled to better and, and, and. All I did was complain but did nothing to change anything, until we lost funding and I saw no way out, other than to quit. Till this day I get goosebumps thinking what my life would have been like if we didn’t lose funding. Most of my colleagues from back then, are still working that same job, at the same desk, in that same cubicle, still waking up at 5 in the morning every weekday, and are on that same routine from 7 years ago. I feel sick to my stomach even considering that this would still be my life.
If you do nothing, you let your life’s circumstances control your life’s path. You end up where life takes you. Due to a dramatic event of losing funding I discovered the hard way, that it is you that needs to take control and maneuver your life’s path in a direction that gives your dreams and goals the highest probability of manifesting!
Are you working on any exciting new projects now? How do you think that will help people?
We are working on several new incredibly exciting (to us) new projects. We have started our own YouTube HGTV-like house flipping series that not only show people how we successfully flip houses, but also through that channel, try to donate one of every 7 flips we do to a family in need. We are still in the early stages to make that a reality, but it is definitely a motivator to keep on pushing hard against life’s path of least resistance. For that give-away flip we intent invite the entire block to help us flip the house bringing that community together, teaching them how to increase the value of their own homes and give people a sense of purpose and goodwill to others. As part of this effort, we will organize a complete block get-together, with music, BBQ, smiles, fun and hard work, which can include the entire community lending a hand fixing fences, help paint each other’s houses and cleaning up that block. We believe that when the YouTube channel becomes popular and we showcase the results of such selfless efforts, more people will follow.
Secondly, we are about to release a brand-new product that will make becoming a successful real estate investor a walk in the park. Yes, it will be a game changer, I promise you that, it is that huge. It is called REIlink, a very novel and efficient way to bring everyone you need to become a successful real estate investor together. Cash buyers, wholesalers, real estate agents, contractors, closing attorneys, hard money lenders, you name it. Very exciting!
What do you think makes your company stand out? Can you share a story?
We devote a lot of time to educate and help other investors, become successful. We organize weekly webinars where we teach people how to get their real estate investing business launched and start becoming successful. This last 3 sessions lasted 5 hours. The feedback and comments we get are heartwarming. So many people write back asking why we do this as it just makes no sense to them why anyone would do this for no apparent reason other than helping someone else out. The unexpected result of doing this is that we have become very well known in this space due to people talking about us! Although we do this virtually through an online webcam video group session targeting the entire USA, we were stopped and recognized in a local convenient store by one of our local followers. It was unreal!
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Jerryll: Each of us (Jess and I) immediately had the other in mind reading this question. Without Jess I am nothing. I wouldn’t eat, I wouldn’t shower, I wouldn’t stop working, I wouldn’t be grounded, and I wouldn’t know what in life is important other than “making money”. The environment I was in was not healthy. Mentally it was toxic, and I couldn’t see it.
Jess: Without Jerryll I would still be “sleeping”, a zombie, a robot. Jerryll introduced consciousness to me. I now acknowledge I am alive and acknowledge that I consciously exist, impacting other lives and other lives impacting mine. It was a difficult journey. I constantly reverted back to being on “autopilot”. I truly started living when I set my phone alarm off every hour just to remind myself and ask myself the question: “are you awake and appreciating and acknowledging this very moment?”. Now life is amazing, fun, doing what I love with the person I love.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
There are of course a lot of character traits that will come handy in each and every possible situation and scenario being an entrepreneur. We have discovered long ago that it is not the individual (as in separate) character traits you need to possess to become successful. It is the perfect combination of several character traits working together that will make an individual very powerful, and success is often the inevitable consequence. You obviously bag more character traits when you have a partner, you spend a lot of time and are emotionally involved with. Things can get tricky of course. The combined character traits of your team in command (CEOs) shouldn’t conflict. Often though, when you have a pair that is also romantically involved, both individual’s character traits should be compatible. I think this is why we are so successful. Because we are such a great match romantically, our character traits complement one other.
- Ambition. Flipping houses is not easy. There is a tremendous amount of competition and there is so much that can and will go wrong. It always has been our ambition that gives us that desire to realize our dreams and goals. Our dreams, goals, our vision of that better life, financial freedom, not for the sake of having money, but for the sake of doing what we want to do when we want to do where we want to do, with the people we want to do it with, and of course the overwhelming desire to provide for mom and dad, who sacrificed so much so we could have the best possible childhood we could possibly have. Every time something goes wrong, terribly wrong, and it just becomes so difficult to keep on going, it is that ambition that keeps us pushing back. As long as your ambition is stronger than the feeling of giving up, you will always keep pushing!
- Persistence. I believe what ambition is to dreaming, persistence is to realization. It is our ambition that fuels our persistence. You can want “it” all you want, but if you don’t fight for “it” and make it happen, “it” will always remain just a dream. It usually is difficult to be successful in a very competitive space. Your resolve will be tested, I guarantee it. Giving up can never be an option if you want a chance at becoming successful. You need to find solutions to hard and often seemingly impossible to solve problems. Ranking my business website to the #1 spot on Google statewide in 3 months was said to be impossible by my peers. I refused to accept this and in less than 3 months we took over Google, statewide, and this was instrumental to our quick rise to success! Ambition and persistence are absolutely the 2 must have characteristic traits in this space. The only thing left is…
- Social Intelligence. You have a dream, a goal, and a huge desire to manifest that goal (ambition). You lack the capability to give up (persistence). You can’t sleep, eat, or rest till you make it happen, whatever it takes (sound familiar?). I bet a lot of your readers feel this way. That is all great, but just “keep trying over and over and over again” doesn’t mean it will happen. You need to be smart about it. You need to have vision and you need to have a plan. Sadly, in real life, you can only plan for so much. Life is such a chaotic dynamic unpredictable system and sticking too much to a plan without the flexibility to adapt will be a big mistake. You need a significant degree of tact, common sense, street smarts, to see the plan through. I promise you, if you have these 3 character traits, success is a matter of time!
Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.
- It’s just what we love to do! Why do so many people love to watch house flipping shows when they know very well, they will never even attempt to flip a house? Is it the undeniable possibility of things going wrong, what people love to see? Is it the amazing transformation and the creativity needed to turn something ugly into beautiful? Is it the rewards of seeing the happy faces of the people getting into their new home, or maybe the potential financial rewards accomplishing the project successfully? Well Jess and I would both say, “yup, all of the above”. Your home is hands down where you spend the most time of your life in. It is where you create a life with someone special. It is where you provide your kids with the security and stability for a strong upbrinning. It is the representation of a happy life. A lot of people equate a happy life to a nice cozy home, white picket fence, a family dog and a happy family. It is hard to describe or put into words what and why the real estate industry excites us so much, but it is not hard to understand why. There is just nothing like it!
- It can be rewarding for everyone involved. Anyone that has ever written or composed a new song/symphony and releases it for the world to hear. Anyone that completed a successful Lego set as a kid and taking 3 steps back and admiring your accomplishment. Any artist, doctor, engineer, or scientist that successfully, completed a difficult task for the world to enjoy. It is that feeling of accomplishment and helping others that gives people ultimately that sense of accomplishment. House flipping is no different. To take a house, demolishing it, seeing it become worse than the condition we bought it in, to then finally and suddenly turn into something much more beautiful, astonishing and cozy than what it ever was before. To see the faces of the people walking through our renovated house and listening in on the feedback and watching the reactions as they walk through the house is exciting. To realize that they explicitly noticed that build-in bench, Jess and I spend 3 days building or that pot filler above the stove within a beautifully custom designed niche. I’ll tell you this, words cannot describe that feeling. It is simply amazing! We love it! It is risky, scary, nerve-wracking, absolutely, but that is what makes it all so exiting to us.
- It keeps us being the strong power couple we were meant to be. It can be overwhelming a bit to be living and working with your life-partner. I see her all day every day and we admit, it is not always rainbows and butterflies. But once the perfect equation is found to balance work and personal life, it is the best way to live your life, in our honest opinion. I (Jerryll) always work, never stop, and Jess, always spends money, way too much money on the flips, (Jess just punched me, but agrees nonchalantly). We keep each other grounded. Jess starts yelling to come down, when I work too much, and I take away the credit cards when she spends too much! We not only complement each other; we truly need each other!
From all the answers we wrote, we just realized something very interesting. The thing that most excites us about real estate is basically the fact that we get to spend time together doing what we love most.
Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.
I can immediately think of 2 of our biggest concerns in this industry.
1. A lot of new real estate investors enter this space and start operating when they are not ready. This does significant damage to the industry. The reputation of real estate investors heavily relies on the opinions and experience of homeowners working with real estate investors nationwide. A bad experience with one individual could easily permanently ruin it for all of us.
Often, excessively low offers, making it considerably harder to earn the trust of homeowners to sell their houses at a price that works for everyone involved. When more and more homeowners get repulsed by the low offer investors make, more people that hear these stories won’t even consider contacting an investor to sell their house, while in fact, an all-cash offer for their house could often be a great solution to get rid of a distressed property fast.
To address this, we feel like investors need to understand that it is not just about making money but to sincerely help the people that are dealing with a distressed property. They look to us for a solution, and we need to prioritize providing that solution. Once you can see the human side of real estate investing, it really is not that hard to be able to make money and help distressed homeowners in the process.
2. We honestly thought that real estate was, to certain extent, fool proof. Everyone needs a roof over their head and people still need to pay mortgage and, and, and. Our perception of the security in real estate completely shifted after all the new regulations that came along with the COVID-19 virus. Suddenly, tenants no longer had to pay rent, and although the intention was honorable, the concept was very poorly executed. People that could afford to pay rent didn’t, and there was no reliable way to monitor or control who was deserving and who was abusing the rent forgiveness or delay policies put in place to help people affected by the COVID-19 virus.
We are extremely fortunate that we have several real estate related businesses we are relying on for income. Now that the prices of building materials skyrocketed and it being an hot seller’s market, we are mostly relying on our SEO for Real Estate Investors marketing business, for income which honestly has blown up since we started a year ago, to multiple 7-figures a year. Also, we bought many houses that were just sitting there waiting for us to get to them and now of course we rather focus on flipping and selling these houses rather than buying more when the prices are so ridiculously high, which is obviously a good thing now that we are selling our flips. Although perfect timing, we got lucky! Now we are very conscious about the market and our flips, and we try to keep a serious cash reserve for when things get tough!
The point here is that with these extreme market conditions and the extreme measures the government is willing to take, the real estate industry can be now even more unpredictable, and that is a huge potential concern of ours.
What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?
Celebrate and acknowledge individuality and character traits of every person in your team. Treat your team as people you respect and acknowledge their wins instead of only reprimanding their losses. Every house we successfully flip and sell we celebrate with the team. Everyone is responsible for that win and everyone should be acknowledged and rewarded for it.
Give everyone a voice and develop a system where everyone can have input on decisions that matter. We ask our employees whether to paint a house yellow, or the door orange, or put a dormer in, and share the results of the decisions they helped make. We make them aware they matter and are an integral part of the company.
Ok, wonderful. Here is the main question of our interview. Can you please share with our readers your “5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties”? If you can, please give a story or an example for each?
Here are the 5 things you need to know to create a successful career buying rehabbing and selling properties.
- Be Excellent At Buying, Rehabbing, And Selling Properties. How often have we all heard the saying “You Make Money When You Buy”. This couldn’t be more misleading. You make money when you buy, rehab AND sell (the property). You must master all three of these stages to become a successful house flipper. House flippers often focus a lot on buying the property for as little money as possible. Then they focus on getting the rehab done as fast and cheaply as possible, focusing more on what they can get away with taking shortcuts, rather than what would people love to see that would make them fall in love with the house. Then they completely neglect the selling process, thinking that it is out of their hands after the rehab is done and put on the market. You are making a big mistake not taking each and every one of these 3 stages of flipping houses for profits very seriously. Buying at the right price gives you some room for mistakes that cost extra money to fix. Rehabbing the property right will make your end buyer completely fall in love with the property and confidently offer top dollar for that product you delivered without much fear of hidden underlying issues you can’t see. Strategically handling the selling process (like putting it on the market at the perfect time, nicely staged, below market value), could result in a bidding war resulting in a final offer that is $20K over asking price (happens to us quite regularly)!
- Love What You Do. If you do anything just for the money you will eventually burn out. You need to have a passion for the work you do, otherwise it will forever be just a job. Becoming successful is not so much a challenge as it is to stay successful. Things will get tough, and you need to be able to rely on that passion for doing it to keep on doing it.
- Deliver Excellence. No matter what business you are in, if you deliver mediocre products, you will fail. When I look at house flipping in general, it very much looks like the idea is “how much can I get away with using the cheapest finishes and still get the most money for it”.
Houses are expensive. Wouldn’t you expect quality buying an expensive product? Houses are no exception! Deliver an awesome product, with amazing finishes. Keep in mind that delivering an amazing product doesn’t need to be expensive. Being creative, a little bit of elbow grease and out of the box thinking goes a long way.
Adding a stove pot filler for example, will run you about an added $250 dollars to your flip, but the perceived added value to the house could exceed $5,000. A pot filler instantly makes the house look more custom and luxurious no matter what area it is in, and potential buyers see that you went over beyond of what was needed to rehab the house giving them a lot more confidence in the quality of your products.
We have several “signature items” every single one of our flips have, and a stove pot filler is one of them! All our flips include them as the return on investment is undeniable!
4. Be The Master Of Your Business. Starting your career in buying rehabbing and flipping houses seems fun, scary, exciting, but before you go jumping right in, know that it isn’t all fun and games. There is a lot that you think you know, but just don’t! You need to understand the main concepts of your business but also the supporting elements that makes the business work. It is not just “buying or rehabbing or selling” houses! Its dealing with people, situations, payrolls, losses, and triumphs, keeping people motivated and a lot more! Knowing how to fix a leaking faucet or being amazing at picking colors for the bathroom walls, doesn’t make you a house flipper, nor does that mean you will be successful making that your career.
You need to learn how to flip houses, you need to learn how the building codes work, you need to know your market, what is in and trending, what is outdated, what buyers are looking for, and everything else that comes with the actual running the business of flipping houses.
House flippers often do not realize that you also need to learn how to work with people, how to pick contractors, how and when to fire them, and legally protect themselves from conflicts with contractors.
As a house flipper, you need to learn how and when you need to hire your team, how taxes work, how to legally run a company, setting up payroll, making sure your company is in compliance with the state and all the costs involved with keeping the company in good standing with the state. We had no idea of any of this and now we are about to pay more than $500K in taxes and other fees that come with running a successful business. Yikes!
5. Know Your Numbers. Then the most common place where people fail, is not knowing their numbers, all the numbers. You need to know all the costs of running a house flipping business and how to accurately estimate them. Be careful to not limit yourself to the renovation costs, but also include all the other costs involved with running a house flipping business, like the cost of money lending, holding costs, permit costs, insurance costs, appraisal costs, certificate of occupation costs, and many more. Once you account for all the costs associated with not just flipping a house, but running a successful house flipping company, things instantly can get overwhelming and you will realize how difficult this business truly is doing it successfully!
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?
Mistake #1: Relying On Someone Else To Find You A (Good) Deal. To flip a house successfully, is one thing, but to run a successful house flipping business, is entirely something else! To become a successful house flipper, you need to become a master marketer. A lot of house flippers delegate this task to people that have more experience marketing. Although I absolutely believe in acknowledging your strengths and weaknesses, marketing is something you simply need to make your strength at all costs. Becoming a successful house flipper is not just about knowing how to flip a house but having several deals in the pipeline, so you are always ready to flip the next house!
Mistake #2: Skipping The Inspection On A House You Are Buying. Always get an inspection done on a house you are planning to buy. No exceptions! Avoiding a 400-dollar inspection bill doesn’t justify thousands of dollars in unexpected additional rehab costs that an inspection would have uncovered.
On my first flip, this was before Jess was part of any of this, I had no idea what I was doing. I read all there was to read on flipping houses and thought I was prepared. We put a house under contract ready to close till someone told me to do an inspection. The house needed a full gut, so I didn’t really see the point, but I decided to do it anyways. It turned out, there was a buried oil tank that was 60 years old, and it was leaking. It cost $45K to clean it all up and we dodged a bullet. I was extremely lucky. That would have been my first and last flip if I didn’t get that inspection done. From that day on, we do inspections even if it is a new construction house we are buying!
Mistake #3: Know When To Walk Away From A Deal. Completing a successful house flip project starts with buying the right house at the right price. We all want to make money and we all want to be successful in the least amount of time, and because of this often flippers don’t take the time, to fully understand how to calculate the profit numbers accurately before they buy their next/first house to flip. More importantly, they manipulate the numbers to make the flip seem more feasible than it really is. Know when to walk away from a “deal”.
Mistake #4: Not Fully Understanding All Costs Associated With Flipping A House For Profits. There are a lot of costs associated with flipping a house, some are obvious and straightforward, while others, not so much. Holding costs, insurance costs, utilities, taxes, capital gains, cost of money, Interest cost, permit costs, certificate of occupancy cost, appraisal and home inspection costs, potential delays cost, things-that-can-go-wrong costs, unexpected expenses, agent fees, commissions, and more, all eat away at your profits. Make sure you account for all of this before you buy your first/next flip.
We learned this the hard way. During one of our early flips we were expecting a profit of $80K and were shocked to see the final check written to us to be $47K. Although this is still a great profit, it was devastating when you are counting on that $80K just to get a little over half of that money. All the little fees and bills definitely added up. I will tell you, we quickly learned how to add up all the numbers for the next one!
Mistake #5: Not Thoroughly Vetting Contractors Before Hiring Them. More often than not, flippers will hire contractors to do the work on their flips, but rarely do flippers vet these contractors at all. Issues with contractors is by far the most common reason a flip goes drastically wrong and this is the most important part of the project to figure out. Reading a few good reviews and scrolling through some pictures of work done is absolutely not enough. Instead ask them for addresses of some projects they are currently working on, and stop by unannounced and check out their work, and talk to the owner of the house and ask them their opinion on the contractor. Other things we personally take into account is the condition of their truck, how many employees they have, and how busy they are. If the contractor can start immediately, we wonder why that is. If they were really good, shouldn’t they always be working on clients’ projects?
Mistake #6: Not Putting Iron-Clad Contracts, And Other Legal Paper Work In Place Before Hiring.
- Everything needs to be on paper and signed by everyone involved. Any change or modification of plans needs to be documented and acknowledged in writing by all parties involved.
- The contract should clearly stipulate without room for misinterpretation, the scope of work in full detail, and the materials used, including the type of finishes throughout the project.
- Payment arrangements, terms, and amounts, need to be laid out.
- Make sure that the total amount of work done by a contractor is valued more than the amount paid to that contractor. If the contractor suddenly bails on you, you need to make sure more work is performed than what you paid.
- Every person that has done work on the project needs to sign a lien waiver form at the time of payment, so that no one can file a lien on the house at a later point.
- Make sure your contractors are licensed, experienced, and insured!
Mistake #7: Not Knowing When To Cut Your Losses And Fire Your Contractor. When your contractor skips work, delivers poor quality finished work, or takes too long to finish or communicate, you will be better off firing them and quickly find another contractor. This is such a hard thing to do but convincing yourself that “it will get better if I just talk to them and give them another chance”, will be a big mistake. I can tell you that things won’t get better. Fire, hire, move on!
Mistake #8: Not Having A Backup Contractor In Place, Ready To Jump In. Build a network of contractors and build rapport with them and always have contractors on standby to take over when they are needed.
Mistake #9: Not Pulling Permits When You Should. Play by the rules, always! It is not worth not to do so. You do not want to be on the bad side of the building inspector. Ask him for advice, build report, with him, and play by his rules no matter how unnecessary it seems at that moment. Not only can building inspectors put a “Halt All Work” notice, which will significantly increase delays and costs, they can fine you, and even make you undo work or open up the walls just for them to see that electrical and/or plumbing is done to code. Plan for building inspector inspections into your timeline.
Mistake #10: You Overestimate Your Skills And/Or You Underestimate The Flip. We all want to save money, but be realistic assigning yourself construction work. Again, flipping a house successfully, is not the same as running a successful house flipping business. You shouldn’t be the one doing the work. There is nothing wrong with rolling up your sleeves and build an accent piece for the house to make it stand out. This is definitely a highlight for us flipping houses but know if it is feasible to do.
Every time to this day, we STILL underestimate how long a “simple” project takes us, and we always get in trouble doing so. We just are too in-love with doing hands on work we do it anyways, but now it is part of our calculated risk!
Many house flippers want to tackle the work themselves to save money on the rehab costs. Often this is a huge mistake. When you have plenty of money and time and want to have fun experimenting, by all means do it then. But most house flippers have not yet reached financial freedom and they need the highest probability to finish the project on time and within budget. You are better off letting a licensed and experienced contractor handle this.
Markets change and they can change in a matter of months. Spending too much time doing the flip not only risks the market to change, but also the seasons. Selling a house in November is not ideal and passing that august deadline can significantly impact your profit margins.
Mistake #11: You Don’t Understand The Concept Of House Flipping. To flip houses successfully, apart from being knowledgeable in all the technical aspects of the actual flipping the house, you also need to understand the psychology of it all. You are not the one living in it when the flip is completed, although we have to admit, we completely fell in love with one of our flips and ended up moving in. Personal objective taste is great, but just personal taste needs to stay in check. You need to understand current trends, and what people are looking for in a house.
Often flippers either do too much or too little to the house thinking they will get a return on what they did, that shouldn’t have been done, or save money by not doing what should have been done.
We carefully analyze the minimum requirements on every flip based on the market, buyers pool, and location the house is in. Once we have an accurate minimum requirement model of the house flip project, we then start the creative design project by answering the question: “How do we make this house look like it came straight out of an HGTV episode without having to spend an extra thirty grand on it?”. That is the fun part, and there is what makes it worth it for us, and this is why our properties only spend hours on the MLS and get consistently over asking price for our flips!
Mistake #12: Caring More About The Money You Save Taking Shortcuts Than The Quality Of Product You Deliver. Poor quality finishes and poor craftmanship is very common when we see investors flip houses. Obvious shortcuts made, and no attention to detail seems to be a standard practice. A house is probably one of the most expensive items anyone will ever buy in their lifetime. People want quality when spending a significant amount of money on a product. The focus should always be on quality of your product. Go over and beyond and you will always over deliver!
Mistake #13: You Are Not Sticking To The Plan. Stick-to-the-plan! There are so many moving parts to a house flip and things will go wrong, ideas will present themselves during the flip and things will change and deviate from the original plan. This cannot be avoided, however… you need to be aware of the consequences of changing plans during a flip and you need to be completely aware of the financial impact these changes will have. From experience I can unequivocally tell you that there will rarely be no negative impact changing plans during a flip. Bad idea! Stick to the plan at all costs!
We give ourselves 3 to 4 days to come with a solid plan of action and a solid design before we touch the house. We study every nook and cranny of the house and together Jess and I will throw ideas and finishes at each other. I use my engineering skills to evaluate feasibility of an idea or design both conceptually and structurally and we do our best to predict possible concerns, challenges and solutions to every possible challenge we could be facing realizing our design plans.
Then the demolition starts, lasting up to 3 days. We use these 3 extra days to allow for any plan changes and updates to happen. After demo we measure the entire house again to draw up a digital model of the house and realize our designs and analyze that design for aesthetics, feel, and functionality trying hard to pretend we actually lived in that house.
Spending all this time and effort can feel like delaying the project, but believe me when we say, that if you do this right, the rest of the project will run smoothly with minimal hiccups. Remember delays happen when you run into issues! If you can take the time at the beginning to make sure you won’t run into issues, the project will fly by so much faster.
Mistake #14: Underestimating/Neglecting/Ignoring The Selling Stage. There are 3 main stages to flipping houses successfully as a profitable business, the buying stage, the rehabbing stage and the selling stage. We often see people completely underestimating and sometimes even ignoring the selling stage of house flipping.
The selling stage is as important as the buying or rehabbing stage. From staging to strategically setting the asking price and even marketing the property can be the difference between getting one offer under asking price or being faced with a bidding war!
From your experience, what can be done to avoid those errors?
Some common mistakes can be avoided by doing research, following other successful flippers, and even watching Flipping shows on TV, absolutely. However, plenty of these most common mistakes cannot be avoided by just being in front of your computer or listening to podcasts. Here, education is no substitute for experience. Get your hands dirty, involve a mentor with experience flipping houses and do the first few flips with that mentor. You learn from doing. A book can’t show you the tell-tale signs of a contractor that is about to take your money and bail on you. This comes from experience. But don’t worry, you will get better at this as you flip more houses.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
We would like for all house flippers to donate left over materials instead of these being thrown in dumpster as it is more costly to save, categorize and store these materials than it is to just dump them. With those donations nationwide, houses could be built and donated to deserving families in need. This is a movement we are trying to initiate but it is proving very difficult because of all the challenges making this a reality. But we are working on it!
How can our readers further follow your work online?
We are doing a lot, I mean, a lot, a lot. Depending on the project we are working on, you can follow us through all our social media profiles, our blog, and of course our YouTube channel dedicated to educating others completely free and our food and travel adventures, that we are about to start. Whoo hooo! Here is the list:
YouTube: That Flipping Couple
Blog: The Mighty Investor
Facebook: We Buy Houses In Connecticut
Website: We Buy Houses In Connecticut
Thank you for your time, and your excellent insights! We wish you continued success.
You are very welcome. Jess and I are happy to be part of your amazing series.