Top 5 House Flipping Mistakes - I've Lost Thousands From Them...

After flipping hundreds of houses thus far in my career, today I’m going to share the top five mistakes people make when flipping houses.

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The first mistake people make when flipping houses is underestimating their timeline. A lot of people get into a deal and are very optimistic. Often times, people will calculate their numbers and put it on a three month flip, but flips will take longer than three months. Full renovation flips typically never sell in three months. For us, they take around five months on average.

The second biggest mistake is underestimating the rehab costs. You should always get a true rehab cost and the way to do that is by going out and hiring someone else. You will never be able to scale your flipping business if you’re the only one doing the work.

The third mistake is overdoing the rehab. Flipping houses is a business. You are not building your dream home every time you flip a house. Anytime you’re renovating you need to remember that if you spend $1 on renovating, it should yield $2 in profit.

The fourth mistake is speculating on the ARV. You want to use what’s already sold. Don’t speculate on things you can’t control. Copy the comps, if the comp is at a certain price and done at a specific level of rehab, that’s what should be done.

The fifth mistake is not factoring in money costs. Money costs are whatever it costs you to get the loan for that property. When starting out, many people don’t realize how expensive money can be. Before making offers on flips, make sure you understand what money cost is.

If you make any of these mistakes, it costs you hundreds to thousands of dollars. Try not to let your emotions get to you and pay attention to the data to determine if it’s a good deal or not.

[sallysue]

We've bought and sold over 150 properties. I've had extensive training in business of helping my previous employers prosper. All of the successful business people I know simply bought wholesale and sold retail. The number one mistake of flippers is they PAY TOO MUCH FOR PRODUCT. You have to buy at 60 - 70% of anticipated resale. If there are 20 bidders on a property the biggest dummy is going to get the property. You can't compete with dumb. Get away from crowds. Drive 1, 500 miles from home.

[ChicagoRealEstate]

I appreciate how you share both your successes and challenges in your videos. It's so relatable.

[juvesl]

Just starting my flip house business. Thank you for your informative tips!!!!

[georgeper]

Thanks Ryan Pineda for the awesome tips! I really appreciate it! Subscribed and following!

[bgentsja]

Nice tips. I love how you mentioned the fact that people overdo their rehab because maybe they’re too much of a perfectionist. That’s a huge problem out there. People are not realizing it’s a business. Not something personal.

[romifitzgerald]

Thank you for all the tips, appreciate it. Glad I found this. I am now subscribed.

[realestatemotivated]

This is great game he's exposing. Love it. Thanks for the GEMS!

[bthomson]

To the point and FAST. Two important pluses! 🏘🏠🏡

[TheJustaz]

I wish I had heard these tips 20 years ago. I got into flipping in Phoenix and did well on a number of homes but lost my shirt on others. Overall, I did have fun and made some money along the way.

[ernestgreen]

Excellent information!

Just subscribed! 👍

[djordandjordanarieff]

thank you for your tips, I've also been thinking about doing the same business

[Real.Estate.Report]

4-5 years ago I never would have speculated the ARV. But the market is so nuts in my area right now that my new strategy on my last 3 deals has been to build a super special unique product and sell for above comps. It’s the only way I’ve been able to make the numbers work, but knock on wood hasn’t failed me yet.

I think the biggest reason is that there are a lot of investors around here doing cookie cutter flips and out of state buyers are looking for something more edgy.

[naoh]

Great value in this video. I just subscribed. I'm looking to get into the fix and flip business.

[danieldoucet]

Buying a flipped house gives the buyer the opportunity to realize just how sloppy the finish work tends to be : paint runs, doors that don't stay open, door frames that are crooked, stair hand rails screwed into studless drywall, cabinet handles that are crooked, drywall screws showing through the crackfilling EVERYWHERE. Just install new appliances, fancy lights and mix it up with a molten lava market and people will enter a bidding war and you either overpay or give up. As usual, desperation becomes the salesman's dream.

[alejandrobernal]

I love the fact that you are very opened about your work!
--ALEXB

[AC-qooq]

I made three of those mistakes on my flip. This was my first one I sold and not force appreciated to sell. On the first two days on market, I got three offers. My house hit new Arv. The fn realtor I accepted the deal from was sister to the buyer. They ripped my house apart with indirection report and then addendums, and cut my price down $30k! Was their technique to win the home but to negotiate to their price

[sonipatel]

really to the point and reasonable mistakes.

[gerardoromero]

Good content, you're awesome to learn from.

[DeaconWeeks]

My first flip was done in 2 months and sold for $10k above, asking the first day... in fact, we accepted an offer from an FHA buyer and had to move the date because there is a rule that the house can't be owned less than 90 days by the person selling it. Fun times.

I've gone past my timeliness here and there since lol.

[landlordninja]

Well said. What process are you using to estimate your market rehab cost