The majority of people that want to get started in flipping houses have to do so while working a job and taking care of their existing obligations. In a perfect world we could all just decide to do something not have to worry about loose ends or making sure that we can feed ourselves and our families while we make the transition.
So how should you go about making that transition into something you’d rather do? How do you make the leap to flipping houses for a living? How will you know if you will make enough money to support the lifestyle you and your family are used to? Have you really thought about the risk involved?
Just as much as educating yourself on the ins and outs of house flipping, you should be thinking about and making a plan so that you know when the time is right to get started and then to go full-time.
Quitting that job and all of the security that comes with it can be a lot harder than you might initially think. I never thought it would be so hard, but you’ll soon find out just how hard it was for me.
Not many people know that. I didn’t just wake up one day and start flipping houses, get some big fat checks and tell my boss, “I’ve upped my income. Up yours!” (thank you, Ron Legrand, for that statement). 🙂
Let’s take a walk down memory lane and see how my wife and I started and eventually went full-time. This way you can have an idea of how you might make the transition, or at least prepare you for some things you might encounter or haven’t thought of.
Stuck At Work
It’s really not that hard to think back and remember how miserable I was at my job. For those of you that don’t know, I was a software developer before becoming a real estate investor.
The money was great and I loved the challenge that came with developing algorithms and software to perform different tasks. It’s just that I wasn’t feeling fulfilled.
After a while, the work I was doing was becoming routine. There wasn’t really much of a challenge in it. There wasn’t any desire to try to climb the corporate ladder either. It was my life and it was ending one second at a time (bonus points for knowing what movie that statement is from).
There were mostly engineers in the office where I worked, and most of them had already retired from their first careers and were quite a bit older than me. They were nice people and I got a long with them just fine.
But… they seemed sadly miserable.
Where was the excitement day to day? Why do people end up just going through the motions every day without a strong desire to escape it and add variety to their life?
Don’t get me wrong. I’m sure there are some of them that had exciting lives outside of work, and I know even flipping houses can get to be a little monotonous sometimes.
Gasp. Yes, I speak the truth. We don’t just sit around all day real estate investing in our underwear on the beach sipping pina coladas. Ok, sometimes we do. 🙂
Gotta transition my mind back in time to how it felt at the office again…
Ok, so I wasn’t feeling like I was cut out to just sit at a desk, staring at a computer all day. Looking out the window, there was a great view as we were on an upper floor and I could see people driving down the highway. What were they doing all day? Why aren’t they confined to an office during most of the day?
I’m sure I actually fought any thought of escape back because I just didn’t see how it was possible.
Saw An Opportunity
Then an opportunity presented itself.
The golden ticket, if you will.
My father had begun flipping houses and he was one of those people driving around during the middle of the day, having lunch for as long as he wanted and going on what seemed like a lot of vacations.
But, more importantly, he seemed to have this vitality about him (and still does). This radiance that I hadn’t seen on the faces of the people in the office. He was free. He had it figured out. He didn’t have to be told when you had to be at work and when he could take lunch and go home. He didn’t have to check with anybody about going on vacation. He didn’t have to worry about getting laid off, outsourced, getting a measly pay raise, losing his retirement, having to do more work for the same pay because the company thought it wise to fire more staff without hiring anyone to pick up the slack.
That’s what was possible. Life could be different. We don’t have to trade precious hours of our lives for a small set amout of dollars.
I was pumped. I was super excited. I had to start right away.
I was going to be a real estate investor, flipping houses for a living. How was I going to do that? I hadn’t the slightest clue. I just knew that I was going to.
Did What It Took
There was a lot to learn. What made it easier was studying an old course from Ron LeGrand. He’s probably taught more people than anyone else about real estate investing.
The cd’s from that course got wore out! Everywhere I went, they were playing in my car. My kids got so sick and tired of hearing them (as did the wife), but I couldn’t not listen to them.
All I could think about was flipping houses and the life that I now knew was possible. If you wanted to talk to me about something else, tough cookies. Not interested.
This is what is referred to as a burning desire. This burning desire is necessary to do everything that it takes to sacrifice and put in the time to get going. To build the momentum.
It’s also important to note that though my father was flipping houses, he didn’t tell me step-by-step what to do. He wanted me to learn what worked for me and so let me figure it out on my own. I’m glad he handled it this way. His method of flipping is different than mine. I’ve developed my own system, one that fits for me.
I had to jump in on my own and try things out.
When I started marketing that ‘I buy houses’, I was nervous. There was so much that I still didn’t know, but I knew I wouldn’t ever really know it or become comfortable with it until I started doing it.
You see, you really have to understand that you are becoming a real estate investor. It is who you are. You are probably a lot of other things, but you are also a real estate investor. Even if you haven’t done a deal. You’ve got to understand this and believe it in your mind.
So my wife and I started putting up bandit signs and driving for dollars. We sent postcards to the owners of the houses from driving for dollars. The postcards showed a bunch of $100 bills fanned out with a sky background. The back said, “I buy houses” and gave some benefits of selling their house to me and gave my phone number.
I was more nervous than you would imagine sending these things out and putting up the bandit signs.
If you’ve never advertised before and advertised with your own cell phone number, it’s a weird thing. The first fear is that your phone will start ringing off the hook. Doesn’t happen. The second fear…well I don’t remember what the second fear was. I’m sure you’ll come up with one.
Don’t let them stop you though. Don’t let not knowing how to handle every single situation stop you from starting and doing the marketing. I say this all the time and there is a reason for it. Sometimes you just have to jump to find out that you really can swim.
Don’t let having to work your job and take care of your family stop you either. We both worked our full-time jobs for years while we cranked up our house flipping business.
Most evenings and weekends were spent marketing, driving for dollars, checking on rehabs, looking at houses, and selling houses (we sold them FSBO – For Sale By Owner back then).
In my opinion, it’s better to start part-time anyway. It forces you to focus on the 80/20 rule. This is where 20 percent of the things you do, produce 80 percent of the results. When you are limited time wise, you are forced to focus on the 20 percent of best producing tasks. In fact, I had trouble transitioning to full-time because of this, as I talk about shortly.
Didn’t Give Up
It’s probable that most new people have doubts about whether deals really exist. You’ve probably heard about a lot of deals, from me and other investors on the internet but still wonder if they exist where you live.
The sooner you truthfully believe that the deals exist and are plentiful, the sooner you will find them.
I’m not making this crap up either. The first calls we got were not deals (or might have been but I didn’t really know what I was doing – the more likely reason). Those of you that are subscribers to this blog know how that first phone call went. 🙂
We went through a lot (A LOT) of duds, but we learned from them. We went and saw the houses and talked to the sellers and got a little more comfortable doing it. You don’t have to go to the first meetings with sellers worried that you have to put it under contract. Slow it down if you have to. Just do it though.
There are a lot of unknowns and they will always be unknowns until you experience them. Take that to the bank.
Had we gotten so discouraged with the money spent on marketing and the fact that we hadn’t found a deal in months, we wouldn’t be living the life we live today.
Once we finally did get a call from a truly motivated seller that was happy to sell for dirt cheap, it was off to the races. We thought we believed before. Now we had proof.
I firmly believe this is why the second deal is much faster to find than the first. The third even faster. The fourth falls in your lap. The fifth…well you get the idea.
You now have complete faith in your ability to get deals.
We Were Kicking Butt, But I Couldn’t Leave
We were now doing deals pretty frequently and consistently. This was while we were still working our full-time jobs.
It didn’t take long to realize that I was making much more money flipping houses than working at the job. Which is why it’s strange to look back and wonder why I stayed on the job for so long. I mean, it was about 3 years that were spent house flipping part-time. That’s a pretty long time.
So why didn’t I quit?
We were consistently doing deals, but the security of that paycheck from the job was practically guaranteed. That has a strong pull. There can be doubt in your mind, even after being in this business for several years, that you will be able to keep it all going.
That fear is normal and it can be useful in making sure that you don’t slack up.
I think it stems from the fact that there is natural tendency to do a big marketing push, get some deals and spend your time focusing on fixing the houses up and selling them. The marketing ends up taking a back seat. Then, when the houses are finished, you realize that you don’t have many leads coming in and no new deals.
This process can create a cycle with big ups and downs. Because of it, you could go months without getting paid. I think that is one of the main reasons why I didn’t quit the job sooner.
In hindsight, it’d been much better to just make sure to always continue the marketing! Learn from my mistakes people.
Another issue with quitting was losing the benefits the job provided. Medical insurance can be very steep when self-employed. Make sure you shop around and find out what is available if your circumstances require it.
I couldn’t bring myself to quit, so my job finally did it for me.
I got laid off.
Getting Laid Off Was The Best Thing That Ever Happened To Me
For most people, getting laid off is a miserable and frightening experience.
My mind was racing. Not with “oh crap” thoughts. They were more the “hell yeah, let’s really crank it up” thoughts.
My manager was even telling me that he was going to fight to keep me on and was quite shocked when I told him not to bother. That actually scared me. I was actually scared my manager would try to save my job for me. Crazy. But, I’m glad he didn’t.
A weight was lifted off my shoulders. I no longer had to struggle with the decision to quit. It was made for me, and I was super excited.
So many people have asked me when I knew to go full-time as a house flipper and I sometimes wish I can talk about when I decided. But I never had to decide.
Instead, I tell people to focus on always marketing, no matter what. Don’t fall into the trap of getting caught up in the other activities so much that you stop marketing.
If you can do that, consistently get profitable deals, and cover your living expenses, it’s time for you to go full-time. I never advise quiting your job before doing some deals. Never.
Struggled A Little
Once I went full-time, I actually struggled with working harder. I found myself doing things that were unnecessary just to feel like I was being productive.
I was running the business part-time for so long that I got used to focusing on the most important things and getting them done quickly. With all of the extra time, I started to stress myself out because I didn’t feel like I was doing enough.
Of course, it didn’t take long to get into a pretty good rhythm. That’s when I got to really relax a little and enjoy the benefits of being my own boss.
Whew. Those first weeks and even months were a little stressful just because that steady paycheck was no longer coming in. Of course, much bigger checks starting coming instead. 🙂
Get To Enjoy Freedom
Now we have the excitement that comes from calling the shots every day. Deciding what we want to do when we wake up and changing plans whenever we feel like it.
If we want to just go and see a movie in the middle of the day, we can. If we want to pursue our hobbies more, we can.
In fact, I don’t think that I would have ever been able to get my private pilot certificate and fly airplanes if it weren’t for the freedom this business has allowed us. It just wouldn’t have been feasible from a time and money stand point.
Jim Rohn, the master business philosopher, mentioned in one of his programs to make sure to “never miss anything” when it comes to your kids. Now it’s not hard to be able to hold to that. I know that I will not have to look back and wish I was able to be there to witness everything that they do. That feels pretty darn good.
One of the greatest gifts from all of this is that our kids will grow up knowing that going to school, getting a job and working for someone else isn’t the only option. If they choose to go that route, that’s fine. I’ll be happy as long as I know they had other options and made the decision for themselves.
I don’t say all of this to brag. I just want you to know that I am showing you what is possible, just like my father showed me so many years ago.
This all is completely within your realm of possibility and your reach.
You just have to decide you want it bad enough.
It’s Your Turn
Is it time for you to start taking some baby steps? Have you been trying to learn more than you really need to get started?
You could put a free ad on craigslist stating that you buy houses and see if anyone contacts you. Talk to them about their situation and ask them some of the questions I recommend asking motivated sellers. If it seems like something worth looking into, contact a local investor and see if they could help you look into the deal. Of course, it would be best if you have started networking and found a serious investor that is doing a lot of deals every year that you feel you can trust.
Even if you don’t know a serious, local investor, don’t let it stop you. It’s time to take action.
If you’ve been through the transition and have any advice you would like to share with everybody, please leave a comment below. That would be much appreciated.
If you are getting started and have come away with something in this post that you feel will help you make it, a takeaway, please share in the comments as well.