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.
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.
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.
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.
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 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.
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 quitting your job before doing some deals. Never.
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. 🙂
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.
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!
-DannyNext: Online Lead Generation Part 3: Pay Per Click for Real Estate Investors
Danny this post was just what I needed. I have been in the business since October 2012. I have landed my first deal back in January and plan to close on another deal this month. Currently I am only doing this part time and working as a Nuclear Engineer. I got into this business to become self employed and with plans to have my wife stay at home with our newborn. With all this being said the post is just what I needed because its been times where I wanted to give up but with the marketing channels i have created I have been calls by sellers who are motivated and not motivated. I see how the consistent marketing can bring in leads when I just focus on the marketing. I soon will escape the 9-5 and have the financial freedom. Great Post, this gave me more fuel to keep marketing. Talk soon.
That’s great! I’m sure you can feel the momentum picking up. Keep that marketing going and you can be like a freight train.
Keep in touch. I’d like to hear about your progress.
Fantastic post! I’m currently working the corporate rat race as an IT engineer. An epiphany one year ago leads me to the realization that I’m in the wrong career. Over the past year I’ve spent much time evaluating many different career options and it came down to 3 options:
2. Sales engineer for IT
3. Something in real-estate and get licensed
Unfortunately, with a family that relies on me I’ve determined #1 as a professional pilot is out of the question for several reasons. Plus, my life-long best friend flies professionally and he’s always away from home! So, he and I have determined I will eventually private license so we can eventually fly together…someday! #2 – Sales Engineer for IT stuff is out of the question. If you don’t enjoy talking about the thing you are selling, then you’ll never be a great sales person for that product. Simply put, I’m burnt out of the IT scene.
So, that leaves number 3. Before I even put these options to paper I’ve been reading about RE investing because it intrigued me. It wasn’t until a couple months ago that I had an “ah ha” moment when I realized that I could combine my desire to practice as a licensed real-estate agent and invest to make a “free-from-corporate” living. I’ve never been interested in being a full-time RE agent, therefore, splitting that desire with RE investing seems like a good balance for my interests. Since then I have been absorbing as much as possible and currently making my first steps towards being a RE investor.
Needless to say, this post really resonated with me! Thanks for the encouragement Danny!
A quote that always comes to mind while sitting in my cube: “The trouble with the rat race is that even if you win you’re still a rat” Lily Tomlin
Thanks for sharing, Dan.
Sounds like you have your big WHY figured out and which path you are going to take. I like that you’ve come up with what interests you (mixing agent and investor).
Hopefully you can get the Pilot certificate soon. It’s absolutely worth it and you can come and visit.
This is good stuff to know Danny, lots of important points in here – and it’s great to hear more about your back story. I’m so inspired to hear about how you pulled it off. Thanks for putting out so much great info in this blog!
No problem. Glad you enjoyed it, Seth.
Good stuff Danny! I’ve been part-time wholesaling for a long while now and ready to expand my business into flipping properties full-time. This blog post was exactly what I needed and very motivating to just get out there and do it! look forward to flipping my first property this year 🙂 Thanks for te inspiration bro…continued success!
That’s awesome, Ron!
Be sure to let me know how your flips go. We can swap notes.
Danny, wow great post. Thanks so much for your willingness to share your story. I just came across your blog yesterday, and reading through each one as time allows. But, I did wonder just how you were able to make that leap, how you started out. So, I was truly excited to see and read your post today. I am a real estate agent, but haven’t practiced in a couple of years due to job and family commitments/lack of time. I love the real estate field and have a burning desire to become an investor; so does my husband, as he has done a little of the investing years ago. But, I want to flip houses. I was just laid off from my job and truly dread the thought of going back to work and not having time with my family and for myself. I am just now beginning to research houses but not exactly sure of everything I should be doing and looking for (hopefully I will find out more by reading more of your blogs). I’m going to look up the course by Ron LeGrand to see if that would interest me. I just have so many questions about investing and even how to find a mentor or those in the business. I will continue to follow you; and hopefully I will be doing what I love soon. Thanks again for your post.
Thanks for commenting. Sounds like you are a pivotal stage. I recommend starting with wholesaling, so maybe you could start by focusing learning about that. Finding the deals is the real challenge of this business. If you can learn how to consistently find deals, you shouldn’t have any problems, no matter which type of flipping you decide to do. Work at becoming a great marketer.
For finding a mentor, check out my post about it: http://www.biggerpockets.com/renewsblog/2013/05/08/how-to-get-a-mentor-flipping-houses/
My wife & I spent money on Bandit Signs and put some of them out… My problem is that We have to consider the life expectancy of these signs to be about 15 minutes… Put some out and drive through 15 minutes later and they’re gone!!!!!!!!! I don’t take others’ signs, and wish they wouldn’t take mine!!!!! Oh well, I guess it’s just one of those things…
Thank You for your posts… You truly are inspiring…
Regarding the signs, try different areas and just put out a small handful to see how long they stay up.
It usually varies. Some area around here are the same. They are gone immediately. Some areas they stay up 1-2 weeks.
Look for where others’ signs are staying up as well.
I’ll be the one of the first to say what an amazing post this is danny! You def break ground and show others that they don’t have to limit themselves to what soeciety calls “a good life” or “pursuit of happiness”. I have my 2nd child on the way while already having a 5 yr old and like you said, I never want to miss their eventa. the path to freedom starts with the first step! I thank you for helping me make it!
Thanks for the comments, Howie. It’s great that you are already thinking about that early on for the kiddos.
Well done, Danny. I find that change (even if forced upon us) can bring lots of opportunities. I’ve lived in 4 different countries in the past 5 years and have learned lots along the way. I have property in two of them and am now learning up on the US market so I can buy some more.
I’ve started doing lots of my own marketing for deals (seems more common here) which doesn’t feel comfortable to me. However, I had a potential seller call yesterday from one of my signs so I can see it’s working. Not sure yet if it will turn into a deal but that’s okay because I’m learning and there are other deals out there.
Don’t worry, it doesn’t take long to get comfortable marketing to sellers. Once you find out that they really are thankful that you can buy their house and remedy their situation, it makes it much easier.
You seem to make these posts fit my life so much. Understanding how you started and how you started to begin plus the worries you have really gives insight into how people break into this business. Thank you for another well thought out entry!
Great post Danny. I have been following along with your post for sometime now. I really enjoy all of them.
I sort of took you on as my unofficial mentor through your blog post. I learned so much from you simply by reading your post.
You gave me the courage to finally stop talking about investing and start being about investing.
I know just what you mean about continuous marketing. I probably learned it from you.
Anyway to make a long story short. After several months of running craigslist ads and putting out my homemade bandit signs, that were made of paper and dissolved when it rained. I am proud to say that I have found and contracted my first wholesale deal and I have a contract to sell to another investor. God willing I will do a back to back close in the coming week and profit about $10,000.
Had I not kept marketing even when I was not getting deals signed I would never have gotten to this deal.
Truth be told I probably would have got a deal sooner had I not paralyzed myself with the FEAR of making an offer.
I really want to thank you and let you know you are the biggest contributor to my success in this deal.
Please keep doing what you do and sharing your investing life.
That’s very inspiring, Edward.
You didn’t give up even when you weren’t landing deals. Put those profits back into more marketing. Doing that along with really KNOWING that deals are possible, your next one will follow very shortly after that and the third, fourth…and next thing you know, you’ve done 20 deals.
To your success!
Great post. There’s so much in here that reminds me of what my wife and I went through to become full time investors. I had done a few rehabs back in 2005 and like you became extremely motivated to figure out how to do this business and get out of the rat race. I read so many books and studied online everything there was to find out about ways to make money in real estate. I stumbled across Ron Legrand’s “How to be a quick turn real estate millionaire” book at the library. I read it like 10 times. My family was so sick of me talking about investing. To this day I always say if you don’t want to talk about real estate don’t come around me! The following year I took my weeks vacation and went to his bootcamp in Chicago. That event changed my life. It also cost me 5k which I didn’t really have. I networked, set up my business and learned how to wholesale. Shortly after I got back, I ended up getting a real deal and wholesaled it for 5k. I was hooked. I quit my job in 2007 and never looked back.
There are many days that I work much harder than I ever did at my job, but the return goes all to me. It’s very rewarding. Now I am the creator of my destiny and enjoy all of my freedom while building my business. I have never missed one of my kids’ concerts or sporting events. That alone is the greatest thing that being self employed in real estate has given to me.
I too remember being scared to death to answer the phone when a lead would call. We had a cell phone that would light up when it rang, and I remember being terrified of the flashing phone! For you beginners, the biggest hurdle is to feel all the fear and do it anyways. Just a little success will carry you through.
Thanks for sharing your story. I love hearing these success stories! So many people doubt that people are actually doing this.
I couldn’t have said it better when you talked about feeling the fear but doing it anyway. That has to be one of the biggest deciding factors in someone making it or not.
Thanks again for sharing.
Danny, Thanks so much, really enjoying all the information and stories! I am the breadwinner of my family with a “golden handcuffs” job people would think I am insane to quit. However, quitting it is my main goal. I have been studying RE Investing since I read Rich Dad in 2007 and am a licensed agent now for 2 years, and have bird dogged a few deals. Still having trouble saying the right thing to sellers, and being consistant with my marketing, but determinded to never ever give up! You are really an inspiration, thanks!
Thanks. Rich Dad was a great book.
You’re making things happen and that’s what counts. I can’t wait to hear about your breaking free from those golden handcuffs and enjoy the freedom you really want.
Once again, top notch stuff!
Thanks, Steven. Glad you got your site working.
Good post Danny. I quit my IT job back in 1999 and was self employed selling Life Insurance until times got a little tight. So I got a job at an Insurance company sitting at a desk all day. I can begin to explain how I miss being self employed. I have to give credit to my wife for finding your blog. From reading your blog and taking your course. I have found my passion again. I just have to remember this is nothing that will happen over night.
Again, thank you for answering all my questions and providing an outlet for those of us who wish to change out lives.
That is something that is hard for me as well. I always want things to happen right away . Just got to keep things progressing slowly but surely.
Now take that passion and kick some butt!
Thank you so much Danny, for sharing and being a great motivator. Hoping I can follow in your footsteps.
How long was it before you got your first deal when you started out?
It’s hard to remember, but I think it was between 3-4 months before we got our first deal.
Awesome post Danny. How long was it from the time you closed your first deal to the point your RE business income replaced your job income? Also, whats a good Jim Rohn book you recommend?
Regarding the time to replace the income, I’m not sure. It was so long ago. If I had to guess, I’d say within the first year after doing the first deal.
For Jim Rohn: all of his stuff. His 7 Strategies for Wealth and Happiness and if you can find the audio courses for Power of Ambition. Very powerful stuff.
Danny, this is a fantastic post. I love it because your experience and fears are very similar to what I have gone through.
Much like you I was laid off back in 09 and because I ahead flipped one house at the time I decided to go full time into real estate instead of looking for a job. I learned tons about real estate in that time and I was able to feed my family for more than a year with real estate.
However I went back to Corporate America only to realize that it was definitely not for me. I kept on flipping houses part time and we made a bunch of money on part time basis.
Well, that just recently came to an end as I realized that the pull of a steady paycheck is a very strong temptation and you really have to make a break or you risk staying there forever and be as miserable as your coworkers…
So I just left corporate America to go into real estate and a new business venture. But the only way I was able to do this was due to the realization that I can make a living with my own business and don’t have to depend on a J-O-B.
One very important aspect of cutting the umbilical cord of a job is your personal financial situations and especially being debt free. My wife and I have been debt free for a long time and that makes a big difference on how much more freedom you can have.
You’re definitely correct in your statement about being truly free by becoming completely debt free. That should be a top goal for everyone. That should come before wanting the huge house, or boat, or train or whatever… 🙂
It has been a little while since I have commented on any of your posts, but I HAVE been reading. I signed my first deal on Friday!!! I kind of stumbled across some dumb luck on Saturday and got another very good potential lead that the guy wants to basically give me the house if I take care of his fathers medical bills (sad story, but arent they all?). I havent signed the second… YET. I will be next weekend though. It has taken me 3-4 months to make a deal, but I did it, I DID NOT give up!!! The feeling is incredible once you finally got one. I coudn’t believe it, it only took me, 300 letters, 90 bandit signs and 72 kagillian hours driving for dollars. But things are coming together. The momentum is like a freight train once you get going. Between both the deals (I dont want to count the second chicken until its hatched) I should make about $25k.
For all you out there that have bandit signs out, made business cards, sending letters and soforth and your phone has only rung ONCE, and that was from a contractor wanting to know if you had any work for him (you probably just wanted to choke the poor guy) DONT QUIT!!! Its a hard road at first, but thing really do get better and easier. Thank you for the support Danny, your posts have helped me when I too wanted to quit, being all down on myself. But I finally pulled it off, and i dont know if it would have happened without this blog. Thanks again Danny.
Heres to the San Antonio market! Cheers,
“Formal education will make you a liveing, self education will make you a fortune.” -Jim Rohn
Wow! That’s awesome, Nate!
Thank you for sharing your story. What you say is at the core of making a real go at this business. It is hard in the beginning but what once you get the momentum going, nothing can stop you.
Here’s to many more!
Thanks for sharing so much of your time and story, Danny. I too had a BURNING desire to build a RE business last year, it seemed like a dog year I put so much time into learning and networking. Somehow I got off track and am trying to fight through the feeling that I missed my opportunity. Your blog is a great help in re-igniting that belief that RE is still a fertile ground of possibility.
Thanks for being real and helpful, may it all return to you and yours,
Santa Rosa, CA
Thank you, Russell.
I appreciate that.
The best way to re-ignite the passion and make things happen is to go ahead and start looking for deals. Start a little marketing. Start getting some calls.
Stay in touch. I want to hear your success story.
Danny this was a great story, I am also doing this part time, but I am in school, not working in corporate America. I am wondering if you could give some suggestions on how to attain investors to purchase properties so that after our companies renovate and sell it, the investor gets his money back. plus 15% yearly. I can tell you have achieved what is in my opinion the American dream, so if you could share some of that it would be incredible. Thanks
Best, Dan Gluzman
I thought that was what I was already sharing…
Just kidding. Glad to help.
You can google ‘hard money lender [your area]’ and talk to them to see who has the best terms. You can also start to look for private lenders (may be difficult until you have a track record): http://www.flippingjunkie.com/2011/how-to-find-and-approach-private-lenders-the-ultimate-guide
Great post was really insightful. I just wondered when you decided you wanted to give it a go like your dad, how did you just start buying houses outright, what route did you take in producing the money?
We actually partnered with another investor at first that put up the money and we did all the work. We eventually found private lenders to lend the money on the houses.
Hey Danny. Just read this article and I’m checking out some of your other stuff, soon. I’ve been at this game for a few years now. Was a full time agent and got out when none of my buyers could get loans anymore.
Everyone told me I was crazy investing any money back into the market with the way values dropped. My first flip I did had a small fire that really only caused smoke damage. It did take me alittle longer to finish my first one, not knowing I had to pretty much tear out everything to get rid of the smoke smell.
At that time they were going back 6months on appraisels still. This was back in 07-08 maybe. The beginning of the markets huge dive. I had some comps in the 70-80k range still. I picked that first flip up for 22k and sold it for 96k off the 2nd showing! Not only did I make a nice chunk and prove alot of people wrong….I established a great comp!
I imediately went and bought two more in that sub. The rest was history! It is a fun business but, it’s definitely alot of work. Now that the market has shifted, it creates other problems. For people getting started I will say this….fixing up the house is the easiest part. You can find alot of people willing to work for a decent price. The difficult part is getting your hands on the inventory. Like you mention, your seller leads.
I’m finally at the point where things are starting to run like clock work. Just listed one, just starting on one and waiting to close on a 3rd.
Also, one last thing I’d like to add. I think you mentioned something about this…..it can get tough when you have so much going out or tied up. Until you can get to a certain point, you can really get strung out on your money. Basically you can end up being cash poor until you get to the next closing. Once I got to a certain point, I was able to pick up some really nice homes in the city for next to nothing! Just alittle work involved in the rehab and I was able to Section8 these homes for very decent rental income. That helps a ton in between deals.
When I started this whole thing, I borrowed a few thousand from my family. I had 20k to my name and a 7k credit line at Lowes. It’s a risk but its turned into a pretty good thing for me. And, it feels even better because everyone thought I was making a mistake!
I’d like to show you some of my stuff. Lots of virtual tours on YouTube and photos.
Keep up the good work!
Thanks for sharing your story! Very inspirational. 2008 was a very scary time so I must say you did a heck of a job making it through. It sounds like you went the route of thinking positively and knowing that you could make money when everyone else was running away.
I’ll never forget some of the biggest investors around here talking to me about how there is no shame taking a break and getting a job!!! They sat back but not for long. We just kept going. Glad we did.
You’re very wise to find a way to keep some cash reserves. Very important.
I’d love to see some of your rehabs.
That’s a inspirational story. I am in the same business and I find it very interesting. It makes a living for me as well as it helps a person in need. I have a couple of partners working with me in the Milwaukee area. We believe in helping people sell their house without any hassle and in short time.
I am happy that you shared this story as it definitely adds positivity to thoughts. I really liked your suggestions on starting this business and in fact this is the best way to get started, Craigslist is just an example.
Ok. Great. Thanks, Nick.
I was reading this post and how you felt about your desk job I thought it was me writing it for a minute. Here is my sob story…I had a stroke this past March at the age of 28. Yes a little shocking, but if it taught me anything it was that I want to be happy and enjoy my life. I’ve been thinking about house flipping. We are about to sale a house that we signed a lease to purchase agreement on over a year ago and I regret not doing the remodel I wanted to on that house it could have been so beautiful. I have no idea where to start but I’m beginning my research by reading and learning from others like yourself. I want the life you describe “Get to enjoy Freedom”. I come from a family that I call the rule followers, and I’ve done what I was expected to do all my life I went to college graduated with a tough degree (Biochemistry) got a job got married and have two beautiful children, so this idea is completely different from everything I was raised to know. But if my parents did teach me one thing it was you can do anything you want…so I’m ready to try this route. Thanks for the insight you’ve provided here.
It’s great to hear that you’ve found the benefit out of the adversity. You’ve stumbled upon what some studies have shown is the number one thing that the elderly regret when close to death. They say regret of not living a life for themselves instead of what other people expected was either at the top of the list of regrets or was very near it.
You’ve made the realization much, much earlier than most, so take advantage of it. This can help you tremendously in that you will likely be more patient. When people aren’t patient, they make mistakes. Make written goals and then just focus on the first step for the most important goal. Don’t get overwhelmed. Focus on the first steps.
Hey Danny! Thanks for all of your helpful knowledge! In your 34 weeks e-book, you frequently mention about bird dogging some of the deals that you’re not interested in actually closing on. Can you explain to me a little more how you are able to make that happen. Do you just go on a handshake agreement with people you trust? Or do you draw up some papers for the deal? How do you get compensated and how do you keep track of whether or not your bird dog-ee 🙂 moves on the deal?
Typically, I just birddog to about 3 different investors that I’ve grown to trust. I just send them the leads and follow up on occasion. They know I expect them to keep me informed as to the status of the leads.
I get paid when they close (buy the house).
We’re actually including functionality into REImobile (http://reimobile.com) that will allow people to keep track of leads they’ve birddogged (as well as get people to birddog for them and send them leads). 🙂
My husband and I want this sooo bad. The first house we ever bought is now on the market appraising $100,000 over what we owe. We are highly interested in flipping houses for a living! I’m a teacher. He’s a manager. We both want that freedom. We are also both super handy which saves a lot of $$! The problem…I am scared to death to lose that steady paycheck and the health insurance. What if it just doesn’t happen for us? Did it ever look like you would have to go back to your office job?
This is a common fear. I always suggest making it work part time until you easily replace your income and are consistent in getting deals. Then, it’s really a no-brainer.
Would like to stay in contact with you. I have been finding deals so fast that I can’t turn them fast enough. How many crews do you have working for you
Bring the deals. We’ll buy them. We have as many crews as we need for the amount of houses we are rehabbing. We’ve had as many as 5 rehabs going at once.
I was listening to your BP podcast and have a similar background. However, the most significant characteristic is my being an introvert. It’s not that I’m scared to talk with people, its more that it seems like a lot of effort and it is just easier not to.
Also, how did you reconcile in your mind losing all the health and other medical benefits of a full-time job?
You might be amazed how it is actually worth the effort to get out of the shell. Once you experience of the power of switching trading hours for dollars and knowing the more you do, the more you will make, it will all become easy.
The benefits weren’t a big deal as we were making enough on some deals to pay for insurance for an entire year. 🙂
I have been looking for career opportunities to get myself into this business for quite some time. I was in college classes during high school (program called dual enrollment) and almost graduated with my Associates. After another year of schooling in pre-reqs before vetenary medicine study, I took a year off to help my father and help myself. I had 3 jobs and couldn’t find the motivation to continue going into a career that would have me in financial debt for years and years before I could even enjoy the benefits of having a flexible and caring yet time consuming career and the financial lifestyle that comes with such a career. Although money was never anything I ever worried about because growing up how I have and animals being my entire life, I wanted this career so badly however, I am starting to side with my feelings of not wanting to push forward because the pay is not nearly high enough to compensate the lifestyle I am pushing toward. Houseflipping is something my partner and I have been wanting to start for quite some time and are having many issues figuring out how to start and get the correct funding. I am looking for any pointers and training on how to get started with this as soon as I can.
The best option is to check out my podcast. https://itunes.apple.com/us/podcast/flipping-junkie-danny-johnson-for-those-addicted-to/id1048631778?mt=2
I did a series of episodes that walks through getting started and into advanced topics in order just like you’d learn in a course.
Thanks for the info. I’m truly considering taking a leap of faith and trying our hand at flipping. Worked my job for 25+ years and want to have something to make life easier. Just looking to find as much out as possible beforehand.
You’ve found the right business. It can be a lot of fun. Of course there is a lot to learn so it’s good that you are starting with a good education. Have you checked out our Flipping Junkie Podcast? It’s on itunes and stitcher.
My husband currently flips cars and enjoys it and money can be good. I work as a ER nurse which I went into also to generate revenue to use for flipping houses which is my dream job, as I am talented in design and knowing what looks good with ease and we are smart with how to do relatively cheap and easy fixes to increase profit. Housing market is different as more money is at stake yet more profit is also then possible. I work 2-3 days a week only as a RN and do Agency work so don’t feel too stuck but I do wish to make more and just would love to flip houses and my husband’s sales/people skills are out of this world. Do you recommend we do program by Ron LeGrand and read your articles to get started. How much research before we could get started? Don’t want to be stupid and go into it blind and want to know what constitutes a good deal and generally how the process works! I probably will keep working as a nurse because it turns out I love it & for benefits and security too but I’ve become very serious about starting this. Also I want only to work 2 days a week at my hospital because my daughter needs me more with her at home. Any tips for us? We don’t have much to invest of our own money.