Buying a house is incredibly easy. If you decide to get into real estate, you’ll be surprised how easy it is to line up money and contractors. If you have 30% to put down you’ll find a lender. And if you tell some friend or family member that you found this great place you’re going to make 30,000 on, you’ll be able to come up with the rest. But, you’d better know what you’re doing. I’ve walked through a lot of houses that went for a lot more money than made sense to me. Some of these places made their buyer money and some of them lost money.
IT’S LIKE TRADING
Buying, like placing a trade, is incredibly simple. Selling is the hard part.
Exit strategy is everything. On one of my first real estate articles, I said you’re immediately underwater when you buy a property. If you’re in the flipping business, you’re really in the dream business. You’re in the business of selling dreams.
Basically, I’m in the business of selling a new house that just happened to be built a while ago. Usually, you try to hit the top of the market. If you do things right, people walk in and say wow. But think about it, you’re targeting a buyer who sees brand new carpet and granite. The buyers smell the fresh paint as soon as they open the front door. The floors are spotless. The bathrooms shine and smell like scented candles.
You’re selling a dream. And there’s nothing wrong with that. But when you do this, every detail matters. Something as small as an incorrectly installed (or not yet installed) switch plate cover can turn off a buyer. A decorative strip of tile laid anything less than perfectly will cause buyers to question what else the contractor didn’t do perfectly.
It’s your job to take something that no one else was willing to buy at the price you paid, and turn it around to sell a dream to some lucky homeowner.
Here’s a house I bought a while ago that no one else was willing to get at the price I paid.
Some people would think this house to be a nightmare. The sellers took everything from windows and doors to light fixtures, retaining walls kitchen and bathroom cabinets and even the deck to the pool. This 4 bedroom 3 bathroom, 2270 sq foot house was not a simple paint and carpet.
But, it hit the market again last Wednesday, and with a little luck, it will soon be someone’s dream house. When it’s your business buying nightmares and selling dreams, you’d better know what you’re doing. Here’s how it turned out.
With luck, this should be someone else’s dream house pretty soon.
