Doug Hopkins Free Special Report The 5 biggest house-flipping mistakes that will cost you serious time and money and how to avoid them Hi! Doug Hopkins here from the Property Wars TV show on The Discovery Channel. Your live training event is just a few days away, and as a special bonus I ve created this report to show you the 5 biggest mistakes made flipping houses and how you can easily avoid them. I love flipping houses I ve made a lot of money doing it and it s a fantastic real estate strategy that works in every market, but it takes hard work and determination to be successful. Many first time house-flippers see me do it on my Property Wars TV show and think that s all there is to it. The reality is that on TV you only see a very small fraction of what really goes on. There s a lot of stuff that happens behind the scenes to flip a house successfully. I should know I ve done over 10,000 real estate deals which also means I ve made practically every mistake in the book. When I was starting out I didn t have anyone to teach me the right way to flip houses. Fortunately you do. With my special live training that you re going to be attending along with the info in this report, you can short cut your success and avoid the costly mistakes I ve made along the way. As a way to avoid these mistakes I ve developed my own system that I use every day in my real estate business. It s the same program that you ve seen me use on the Property Wars TV show. My system is called Winning the Property War and it s going to help new house-flippers and real estate investors just like you fast track your success. So here we go. The 5 biggest house-flipping mistakes that will cost you serious time and money and how to avoid them. Mistake Number 1: Not Knowing Your Market Well Enough The first consideration is: Why is the seller selling? Are they truly motivated to get rid of their house, or are they just kicking tires? You don t have time to waste with unmotivated sellers. You want to deal with people who have a genuine and urgent reason to sell such as divorce or
relocation. As real estate investors, our job is to help people who are struggling with real problems, and to help them solve them. We re not here to take advantage of anyone. It has to be a win-win for all parties involved. If a seller is truly motivated to sell they want their house sold as quickly as possible which is why we need to act fast. Your time is valuable far too valuable to be wasted dealing with people who say they re motivated but really aren t. That s why your starting point must always be to find out the REAL reason someone wants to sell their house. If a seller turns out not to be truly motivated you move on fast. NEXT! The next consideration is knowing what the after-repair value of the house is known as the ARV. Many new flippers will just assume what the retail value of the house is without verifying it for themselves. Don t ever make the mistake of letting other people tell you what the retail value of the house is. Always verify it for yourself by getting multiple realtors to provide you with comparable sales in the neighborhood. Do your own research on the internet too, and see what other recent home sales you can find in the neighborhood. Remember, when you re looking at comparable sales, you have to compare apples with apples. You want to look at how much houses in the same neighborhood have recently sold for, with the same (or very similar) square footage, numbers of bathrooms and bedrooms. The next consideration you need to take into account is: Who is my buyer for this house? Many new flippers jump head first into rehabbing a property without having any understanding of the kind of buyer they re rehabbing it for. As a result they wind up over-rehabbing a property or spending money on the wrong kinds of things. For example, in some neighborhoods it may not be necessary to install granite countertops or to invest in all new stainless steel appliances. But equally, adding a little extra feature such as a wine cooler for buyers who would love that added feature may give you a real bang for your buck. The trick is having a rehab blueprint to pick and choose from, depending on the buyer, and being able to implement this as cost-effectively as possible. As part of my House-Flipping System, I have developed actual rehab templates, or blueprints, for you to simply plug and play to help you achieve maximum appeal for minimal cost. Mistake Number 2: Going With the Least Expensive Contractors This is an easy mistake to make for first-time flippers, but it s likely to be one you never make again. Just because a contractor is cheap doesn t mean that they re good. In fact usually it means that they re NOT good. When I was first starting out I once hired a cheap contractor, and while it saved me a bit on the front end it cost me big time on the back end the job took three times as long to finish and the quality of workmanship
was just awful. As a result, it took me longer to be able to flip my house and I got less for it than I would have if I had just paid a little more to get a good contractor to start with. To find a good contractor, ask around. Get referrals from friends and family and make sure you check references. I also recommend you Google them and check to see if they have any online ratings. A good contractor is worth their weight in gold to your house-flipping business. Mistake Number 3: Thinking You Can Do This Alone The first time flipper who thinks they can do this successfully on their own is headed for failure. House-flipping is a team sport. You ll need to assemble a team of experts to surround you such as a general contractor, real estate agent, mortgage broker, hard money lender, attorney, real estate investment coach, home stager etc. You want to find people who are the best at what they do and support you at what you do. There s just no way you can be good at everything and if your attitude is I will do everything myself your real estate investing business will grow at a snail s pace if at all. On the other hand, if you can work with the best people, they ll help you become better, and you ll feel a lot more confident knowing you have a great team of people supporting you. Mistake Number 4: Not Planning for Murphy s Law to Kick In As a real estate investor, you always have to prepare for the worst. That way if or when something unexpected does happen (e.g., the stove breaks, or the hot water cylinder floods the basement), you re not caught by surprise, and you have already factored the unexpected happening into your numbers. I add an extra 10% to my After Repair Value, so that way, if I need extra funds I have them, and if I don t, then I just made more profit on the flip! Mistake Number 5: Falling in Love with Your Flip This is a common mistake many new flippers make. When rehabbing a house, it s nice to turn something that was ugly into something that looks pretty. But remember, this isn t your house. You shouldn t be rehabbing it for your tastes and your standards. Just because you happen to like purple paint doesn t mean your buyers will! Just because you love high-end Bosch appliances doesn t necessarily mean these are needed in your flip. Frigidaire may be all you need, depending on the neighborhood. As real estate investors, the houses we flip are our inventory. They re not something for us to form an emotional attachment to. Our goal is to
bring them up to a standard that will enable us to achieve the best price for them, and then move on to the next deal. When a seller calls my office with a house to sell, I decide whether that house makes sense to flip based purely on the numbers not on how much I love the curb appeal, or the neighborhood or the floor plan. On the flip side, we do the exact opposite for our buyers. Our goal is to have them create an emotional attachment to our flips so they WILL want to buy it! Remember: the numbers never lie. The decision whether to flip a house or not has to be based on the numbers not on how much you like a house! I hope you ve found these tips useful and I m really looking forward to seeing you soon at my Success Formula Real Estate Live Training Event! For more information on my House-Flipping System please visit my website: www.breakthroughwealthsummit.com/free-gifts