House Flipping Couple

This is an empty menu. Please make sure your menu has items.

The 6000 Square Foot Duplex, Amarillo Texas, is the one that got away. This is the story of the home we will call “The Yale House” and it is filled with lessons. At this point, our Real Estate Business was going well. I had built the networks I needed to Buy and Flip or Buy and Hold. It took a long time and was uncomfortable longer than I wanted it to be but finally with just a phone call or a handshake I could buy a house.

When you become an investor and are building your portfolio this is the point where you need to breathe and be aware of the next pitfall. When it comes easy to buy and you have great deals all around, you will be tempted to buy everything you could get your hands on. We purchased over 13 properties that year.

Now where the pitfall comes in, and this is the lesson. I allowed myself to buy the properties without having a plan in place for the rehabs, flips, and rentals. You always need a plan. I thought running the numbers with the rehab cost was the plan. That may be all well and good but it is not a plan. What I failed to do was to put a time frame on the rehab and the flip. I did not have a clear path to scheduling, renting or flipping a group of properties vs a single property.

This is where we help our students take control of their portfolios and investments. We understand the process and are clear about the goals. Imagine being able to sit down together and go over your properties making sure that they fit into the plan and strategy. You need to make sure that you can accomplish the goal.

Having the right detailed plan on how to maximize your profits, build equity, increase cash flow, and strengthen your portfolio is the only goal we focus on together.

SO here is what happened in this story. As I shared my reputation and credibility increased and I was able to easily and quickly get loans for properties. What i did not factor in completely was something called “CASH FLOW” we focus on this in our courses and it is really important.

I was covering the rehab cost, that was my “Skin in the Game” with my hard-money investors. With 5K to 10K per unit “Make Ready” cost, then adding closing cost you can see where that adds up when you buy 13 properties. I never factored in other unintentional intangibles and did not apply the entire package to the “Portfolio Outcome”.

Instead, I was wanting to hold everything but soon realized that I needed to Buy and Flip a property to pay for all the costs I had on the rentals. In this case, I lost some Solid Rental Properties with great equity to protect “Good Properties” with nice cash flow. WIth stronger planning and more experience, it could have and should have Good to Great instead of Great to Protect Good.

The end result was in order to cover the costs of the group of properties I had to let this one go in a flip. YES it worked out and we made money, but we left lots of money on the table that could have gone into our pockets. Using the Trifecta Process we found and secured a 6000-square foot duplex. It was in great shape but needed some updating which we put in after we closed on the property. We were able to get it for 185K, put 70K into the house, and sold it for 295K. The net was just under 50k which promptly got eaten up by the notes we carried on the first group.

Here is the moral had we held the duplex it would be cash flowing at a higher rate than some of the properties we were protecting. It also would have appreciated faster and paid down fast securing better deals in the portfolio long term.

Yes, it worked out but that is not the point of the story. Planning your portfolio outcome is critical. Our students are building legacies not side hustling future depreciating assets. I love this Lesson.