When Christina and I started out as real estate agents, we never thought we’d be active real estate investors. We just thought our real estate business would find good deals on houses for buyers and assist sellers in getting great market values for their houses. We didn’t see ourselves as the buyers and sellers. But then the housing bubble burst and we had a really hard decision to make.
With our combined experience in real estate, it didn’t make sense to start over in new careers. We would have had to spend money and time we didn’t have to gain experience and skills in areas that we weren’t as devoted to as real estate. As a couple of real estate lovers, we had to find a way to stay in the business and make it work for us. Being real estate investors was right for us, but is it right for you? To find out, just answer a few questions…
Do You Like Finding Great Deals?
This seems like a no-brainer, but it’s really the first question you need to ask yourself. When you think of driving through neighborhoods looking for short sales, foreclosures, and other potential leads on great flip deals, how do you feel? If you feel excited, like you want to get out there right now and get started, then you’re probably in the right business.
Do You Like Hard Work?
Are you ready to get your hands dirty? Buying and selling flips is really only the beginning and end of each deal. Most of the work comes in getting the house ready to put on the market. Are you ready to scrub cabinets to get them ready for painting and refinishing? Can you see yourself getting up on the roof and helping your contractors strip old shingles?
If all of this sounds like torture to you, you aren’t necessarily in the wrong field, but you should know that you’re going to pay a lot more money to the professionals if you aren’t willing to do some of your own work. Sometimes it makes sense to hire a professional, of course, but every dollar you spend on a flip is a dollar that won’t go back in your pocket when you sell it. Hiring professional stagers is money well spent, but you shouldn’t be paying your contractors to scrub a floor you could be scrubbing yourself—at least not when you’re first starting out.
Are You Good at Networking?
I’ve talked before about building a great flipping team. From finding and working with investors and/or partners to building relationships with realtors, insurance agents, attorneys, and contractors, you really need to be a pro at networking. If you aren’t really a people person, you might still have a place in the real estate investment world, but it might not be in flipping houses. You might be better suited to being a silent partner for others who are doing the actual flipping and putting in the sweat equity.
Can You Handle Challenges and Surprises?
If you’ve watched our show, you know that Christina is always suspicious of my estimates on rehabs. That could be because I tend to estimate low. My initial guess on the largest rehab we’ve ever done (over $150,000) was only about $25,000-30,000.
While Christina gets to say, “I told you so,” on almost every flip we do, we still manage to push through the surprises and challenges that come our way. Because we’re flexible, we get to create a lot of really great deals and make more money than we thought possible on a lot of houses. But if facing that kind of uncertainty makes you sweat, you might want to reconsider entering the real estate investment field.
So, should you be a real estate investor? If I haven’t scared you off with this post, the real estate investing business might just be the right place for you!