In more than 15 years as a real estate agent, broker and investor, I’ve learned a lot. Some of the most important lessons have come out of making mistakes, my very clearly biggest mistake in particular: In 2006, I decided to flip a house completely by myself.
At the time I was a real estate agent, and I had flipped a few houses before in partnership with my dad. This time around, I believe I would save and make more money by going it alone and decided to buy, repair and sell a flip on my own — in what turned out to be the worst six months of my life.
The Myth Of Savings
I made the mistake a lot of real estate investors make: I thought that by working harder physically, I would save money on labor cost and make more money in the long run. Here is the problem with that thought process:
• I was not a contractor, so it took me three times as long to complete the work as it would have taken a professional. It costs a lot of money to flip a house, and every day you own the property, costs pile up. There is interest on the loan, property taxes, insurance, utilities and maintenance, and at the time our real estate market in Colorado was starting to decline. I lost any savings I would have gained doing the work myself because it took me so long.
• Also because I was not a contractor, the work I was doing was not amazing. A skilled, qualified contractor would have done much higher quality work that looked more attractive to potential buyers.
• I was not selling houses as an agent or finding more deals to flip because I spent all my time on that house. This cost me tens of thousands of dollars…