Give life some time.
Have you ever started exercising at the beginning of the year with grandiose thoughts of being completely ripped by summer? Have you given up early on because you didn’t see the results you wanted happen fast enough?
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Here’s the real crappy part of the whole thing: Have you looked at yourself in the mirror when summer started and wished you had stuck with it? By now you would have likely been ripped. Ok…maybe not ripped, just a thinner, cooler version of your self.
The same exact thing happens to a lot of investors when getting started flipping houses.
This post is going to cover some of the places you are likely to struggle with impatience in the house flipping game.
One of the hardest things for all investors is having patience. It takes time for things to start to fall into place and for some of the work to produce results.
I’m very guilty of being just as impatient as the next guy. There are projects that I’ve worked on in the past that I eventually just left unfinished because I became too impatient. It just wasn’t happening fast enough.
Sometimes its because something shinier ended up getting my attention and I wanted instant gratification. I guess this is what they call being a squirrel.
Anyway, I was struggling a little with getting motivated this last week to work on some projects and it occurred to me that this impatience is the reason why a lot of new investors end up getting frustrated. And a lot of them get frustrated to the point of just quitting.
Most of us know that flipping houses is not usually a get rich quick (and easy) business. But, I think a lot of us fail to realize the amount of work involved in getting it started. Once you push through the ‘getting started’ phase, it becomes much, much easier.
That’s good news. That’s exactly why I wanted to talk about patience this week. If we can just be patient and not force things when they don’t happen fast enough, everything will start to fall into place.
Here’s where I’ve experienced impatience that affected the growth of my business.
There are a lot of times that impatience causes tragic mistakes when new investors are just getting started flipping. The biggest one being jumping in and buying a house that is the furthest thing from being a good deal.
There is a learning curve and it can be tempting to learn some of the techniques and just go out and start looking for that first deal so that you can ‘get it under your belt’.
Don’t let your emotions affect your decisions.
You might find a house that needs a lot of repairs that appears to be for sale for a good price. This desire to do the deal may cause you to make excuses why you should buy the house regardless of whether the numbers fit the formulas you’ve learned for a successful house flip.
You may overlook some problems the house may have that aren’t apparent. Or, someone may be trying to pressure you to do the deal because they will benefit in some way.
Don’t let impatience tempt you into these traps.
There are a lot of people asking me about how to find their first deal. There are many places on the blog that discuss exactly that. Here are some in case you are wondering: Everything I did flipping houses for 34 weeks (all marketing, analysis, rehabs, etc. documented) and here: 57 Ways to Market to Motivated Sellers
I don’t mind people asking, but sometimes they tell me that they’ve heard about or tried several of the techniques already. The questions I always want to ask is, “Did you actually do it?” and “Did you do it enough?”
That’s usually where the problem lies.
Give your marketing a chance to work.
You’ve got to actually try the marketing. Do the marketing, give it enough time to start to produce results (at least several months), adjust it and try to produce better results.
Please don’t mail out 20 letters and give up because you didn’t get any calls. I’ve been discouraged many times after rolling out a good sized campaign that didn’t produce any results. Most of the time I didn’t give up. I changed things, but I didn’t give up.
Mailings depend a lot of the quality of your list. Your list being who you are mailing to. But, with any mailing, I feel you should be sending at least several hundred and mailing the same people with a series of postcards and letters (ideally 7). Now, I will admit that I have a hard time mailing people multiple times because I end up getting too busy…usually from working deals that were generated.
When using bandit signs, you should be putting up at least 25-50 at a time.
As with anything, the more the better.
Don’t be so impatient when trying to make a deal with a seller that you lose the deal or lose out on saving thousands of dollars on the purchase.
You’ve got to be willing to walk away.
It’s best when you are absolutely willing to walk away. The person that feels he’s got to do the deal will likely lose the negotiation. This isn’t to say that you could still end up with a good deal, it’s just that it won’t be as a good a deal as it could have been.
When you find yourself in the middle of a negotiation to purchase a house to flip, and you are only several thousand apart, it will be very tempting to just give in and take it.
I remember very clearly this one time my wife, Melissa, saved me from paying too much. We were looking at a house that was only 4 or 5 years old. I think it only needed carpet cleaning and some painting. We could have this place ready for sale within a week of buying it. I love those.
I really wanted this house. The seller was from out of town and needed to get back to where she lived. We had been negotiating for about an hour (this is not typical for me – it’s usually 5-10 minutes, if at all) and were only about $5,000 apart (I can’t remember the exact details). It wouldn’t have been as good a deal at this price and wouldn’t have fit my buying criteria. But…I was quickly justifying it in my head by telling myself how new the house was and how little work was needed.
I was being impatient.
Melissa convinced me to let her think our offer over and get back to us. Even after we had driven a couple miles down the road, I pulled into a parking lot. I was starting to turn around and go back.
Melissa asked what I thought I was doing. 🙂
We went home. Several hours went by and the phone rang. Yep, she ended up taking our offer.
Guys, you need to listen to your wives.
People to insert: Contractor/Cash Buyer/Realtor/Tenant/Attorney/Accountant/Any other team member
When you are looking for people for your house flipping team, you should realize you are looking for a person that you are willing to have a long term, business relationship with.
Don’t make the mistakes a lot of us make when we are going down our to-do list every day. You know, doing something half-assed just to mark it off your list. You’re marking it off your list but not really accomplishing what you should be.
The first contractor you talk to is not likely going to be the one you will end up working with for years, so don’t stop looking after you’ve talked to one. The same goes for everyone else that will be on your team.
Success in this business is not going to happen over night. A lot of hard work is necessary. A healthy dose of patience will go a long way in making sure that you stick with it so that you can look back a year or two from now and be able thank God that you didn’t give up.
Coincidentally, the lockbox in the picture for this post was on one of the houses we were working on. I had to take it off yesterday. It should have only taken a second…but it tried my patience. Our typical codes were not working and you can tell some of those buttons have been busted off completely. This thing has been through hell.
I was just about to break it open with a screwdriver and brick, when Melissa called me. She got the correct code for me and it opened right up.
As far as my initial comment regarding exercising and losing weight goes, I’m tempted to say that this business is far easier than exercising…
What do you think? What areas have you been impatient with that have caused you some grief? Please share your thoughts in the comments below.
Also, I like it when people thank me by clicking the ‘like’ button for this post. Thanks.
DannyNext: 205: Getting Results Fast
You just hit the nail on the head for me. I never had plans to quit, but I am guilty of being impatient. Thank you. Getting those bandit signs up!
Great. Let me know how it goes.
I too, get impatient on a regular basis and my wife sets me straight most of the time. I think instant gratification is more common these days (or at least it seems that way). You might have mentioned this before, but I wanted to know when you are about to purchase a property, how do you verify how much the owners actually owe (if anything) on the property? Do you simply ask them to show you their mortgage statement or the deed? I would think “taking their word for it” wouldn’t be acceptable.
I just ask them if anything is owed. They tell me about 95% of the time. When they don’t, they’re usually not motivated to sell.
I do take their word for it. What they owe doesn’t affect what I am going to pay for it. I just want to know what they owe so that I can quickly determine if they even have enough equity for me to be able to make the kind of offer I need to make (65% or 70% of After Repaired Value minus the cost of repairs).
Great post! It took me a year to find my first deal…and even now the deals seem to ebb and flow. When they come, they all come at once. Then, at other times it’s slow going.
As far as my previous question above, if they tell you they have tons of equity and you buy the property but then it turns out that they don’t have any equity at all, does that turn into problems? Sorry for the elementary questions, but just trying to be extremely prepared before I jump in…Thanks again for all the valuable info:)
All liens are paid off at closing. The title company requests a payoff for their loan balance so that the loan is paid off at closing with the funds I used to purchase the house. Their loan doesn’t stay in place unless you are buying ‘subject to’ the existing financing.
Great article. Impatience is tough one with marketing. I remember when I first started direct mail marketing going almost 3 months with nothing but “take me off your list” calls. Then out of nowhere 2 deals in 2 weeks. I couldn’t believe it. Now when ever I am in a marketing slump I look back on that experience to help me through.
I really enjoy your articles Danny, I am doing rehabs but consider myself still new to this business. I can relate to what you write about, and I think it helps me stay focused and not get too full of myself. For me, success in this business is incredibly exciting.
I’m glad you mentioned the slump in deals. It almost seems like it usually either feast or famine when it comes to good deals. We used get them in short bursts and then have some times when we don’t get anything. It’s good to know that that is how it happens so that we don’t get discouraged when we have a dry spell. We know there will be a flood shortly. My flood just ended recently…was swamped with rehabs. 🙂
Danny, talk about timing! I’m in the middle of two deals. The first one is my/our first flip. The second is a property that we closed on yesterday. I’ve spent most of the afternoon setting appointments to interview contractors for that project. Looks like there are a bunch to pick from, now to winnow the chaff. I really appreciate your insights and humor!
SWMBO claims that she is the one with patience. Me thinks not so much.
I guess it depends on what we are being impatient about right?
Awesome to hear you are doing some deals. With the contractors it is especially important to spend the time to find the right one. Seems like every time I am getting frustrated and having problems it all comes from issues I’m having with contractors (which can probably be traced back to me personally, either by letting things get out of control or what not).
Hey good advice Danny. It took me 2 years to learn this lesson……(often the hard way). And you summarized the idea very well. And Ralph don’t believe what sellers or real estate agents tell you. “Trust but Verify”.
Trust but verify!
I’ve experienced that many times being impatient. At the same time it depends on who you are doing business with. Preparing before hand is priceless. In response to @Ralph, having no equity is a good thing as well.
Preparing before hand is definitely priceless advice. So many things are handled better when we just stop and think calmly before we act. This is what I try to do before handling a problem that has made me angry as well. If I just went ahead while angry and tried to handle the situation, I’d probably make it worse.
The lock box part is funny and hits close to home. I was ready to go in a window and take off the door knob. Fortunately I remembered one more code we use. Now I write the current one down on the inside of the file so I don’t have to remember. ULTIMATE FRUSTRATION!!!
P.S. Hacksaws don’t work either.
“Hacksaws don’t work either” LOL!
I’d probably end up so frustrated that I would kick the door in before I tried a hacksaw…
It’s funny how we don’t even know the codes for the lockboxes on our houses sometimes. 🙂
My wife sounds a lot like yours 🙂 She keeps me out of trouble when I start getting emotional about houses, and reminding me of little things. It works both ways though. It’s always fun to look back and poke fun of things each of us could have really SCREWED UP if the other hadn’t caught us 🙂
I think so.
Except, I will concede that she has kept me out of far more trouble than I’ve probably kept her out of. :0))
If my wife ever reads this…she’ll be quite surprised to see that I agree with you 100%. She keeps me out of A LOT of trouble.
Wow, I can’t believe I’m current on all the reading! Yay…
Patience: with yourself, for not taking action sooner. I sat on the fence for 7 years because I thought REI would be too risky, I didn’t want to bankrupt/hurt/etc. my family…(um, right)
Too much analysis paralysis, too much self doubt, and too much co-dependence on the 9-5 steady paycheck illusion. Patience and forgiveness.
Forgiveness is a great thing to add.
I hope you don’t end up going through withdrawal while waiting for the next post now that you’ve read all the previous ones. 🙂
great reminder. One think that impressed me the most on your 34 weeks of flipping houses was your persistence AND the number of contacts your regarded as not being a good deal. That showed me a terrific example of being patient waiting for the right deal and not wasting time and money on bad deals. I have been guilty of being impatient and spending time trying to force a deal to work and still coming up with nothing. Thanks for spending the time you do on your blog.
That’s probably one of the best things to learn from reading the 34 weeks posts. I think a lot of people know that it will take consistence and persistence, but just don’t know what that means in terms of how many leads and how much marketing is required. Those 34 weeks shows in real world terms what it took us.
You should see how quick I can get off the phone when I realize there is no possibility of a deal. 🙂 Of course, I do it without being rude.
As always, Great Article Danny.
I think exercising patience in life helps us all and with this business it is absolutely paramount. Thanks for motivating all us fence-liners to jump off and get busy.
A little physical exercise only hurts a little.
Thanks. Glad to be getting people to finally take action. That’s where things finally fall into place and the realization that this business really is within reach.
‘A little physical exercise only hurts a little’ – depends on what kind of exercise – I absolutely loathe cardio but have been working at it (Insanity).
Hi Danny, I justwanted to thank you for truly helping people in your blog. It’s rare for a person to just help without incentive these days. If you have any products to sell on the topic, then I’d get them.
Thank you, Christian.
I’m really trying to focus on getting people to take action and get started.
Don’t tell anybody, but I’ve been working on something that will be finished very soon. 🙂 Subscribers will find out about it soon.
It appears that you do most of the leg-work to find your properties on your own (mostly via web-site and bandit signs), but I wanted to know if you ever buy properties from wholesalers? Would you recommend that avenue to those just starting? I would think that the profit margin is smaller, but the time and energy saved from trying to find the deal, could possibly be worth it (maybe in the beginning). Thanks again..
A deal is a deal no matter where it came from. If a wholesaler has a real deal, I’d be happy to buy it. If you can find some good deals, that you verify yourself, then it can be a great way to get your deals.
I think a lot of investor give up on wholesalers because they found most deals to not really be deals. But, I think they go into with that mind set and actively work at ways to prove it to be so, even if it’s not true.
Just keep an open mind and be willing to give wholesalers a shot. If you aren’t analyzing a lot of deals right now, then it’s a good place to get some to analyze.
I agree completely. Too many people invest in property then bail out when it doesn’t start making money right away. Sometimes you just have to be patient.
I think your comment about patience and negotiating are key to new investors. Right now I see a lot of new investors coming into the market. It’s almost like 2005 again. They are impatient and willing to pay too much to get a deal.
I’ve done many deals under $10K. Some needing very little work. They are not easy t find and they take work to negotiate but they are out there. You only find them by taking action, being patient and persistent.
I also see a lot of similarities between then and now. The impatient don’t last long, but they seem to get replaced very quickly.
“but they seem to get replaced very quickly.”
That made me laugh 🙂
Patience is still a major struggle for me. I am in the process of buying a rehab house right now (which im ‘presuming’ is the main source of income and cash cow for investors). On the side I am still working to wholesale. I have sent letters and put up 50 signs. The signs have only been up for a few days so its still too early to tell. But I have only received 1 (ONE!!!) phone call. And that was a contractor wanting to know if i had any work for him… Patience is surely a virtue but I’m hanging in there. Its just kind of a head scratcher how thousands of people drive by the signs everyday, and you only get one call. Is this normal??? I am hoping that I can make a deal happen with wholesaling to put a little money back in my pocket while waiting for the rehab to be fixed up and sold… Anyways, thanks for the reminder again. -Nate
“I have sent letters and put up 50 signs. The signs have only been up for a few days so its still too early to tell. But I have only received 1 (ONE!!!) phone call. And that was a contractor wanting to know if i had any work for him…”
I had to laugh at this, not because of how much of a let down it is (which it is), but because I can remember exactly how that felt when it happened to me. Sometimes you will wonder if they are the only ones to call bandit signs.
This is what keeps people from continuing with this type of marketing. Don’t let it stop you. Put more out. Try different locations. See how long they stay up.
Sometimes a 100 signs would only give me 1 call. Sometimes 20 would give me 8 calls. You just never know. It only takes one good call though.