image
Want to see step-by-step how to get your first deal?
Get Updates!

Twenty Ninth Week – Expanding Your Comfort Zone

Home » Blog » 34 Weeks Flipping Houses » Twenty Ninth Week – Expanding Your Comfort Zone

Here is what happened during the Twenty Ninth week of documenting our flipping houses adventures. If you missed the first post explaining what I am doing, please visit this page: See How We Are Flipping Houses.

These are the things I did this week:

Worked On Expanding My Comfort Zone

Needed a break from the business, finishing the work on our house, and getting ready to move so I decided to schedule a lesson on aerobatics with my flight instructor.

I went yesterday afternoon. What a blast! We went through the sportsman known routine for the 2011 national aerobatics contest. I’ve flown aerobatics once before with my instructor in his Pitts S2B but just to go through some of the basics. This time was all about learning and focusing on precision.

Loops, rolls, going straight up and straight down, flying upside down, spinning and combinations thereof. Very disorienting to say the least. It took a lot of focus and the hardest part was handling the forces put on my body as we were pulling through some high Gs (high to me at least). Very difficult to stay focused and coordinated when your body feels like it weighs over 6 times what it does. I’d be lying if I said I was comfortable and confident throughout the lesson.

The reason why I bring all of this up is that it gets into expanding my comfort zone. This lesson was not comfortable and was very challenging. Afterwards I wasn’t elated, I was exhausted and wondering whether it is something I want to pursue. This questioning is normal in anything new that we do that takes us out of our comfort zone. After some more thought and looking back at the flight, I am again excited about it and know that I can push through the tough start and get comfortable doing it.

The same is true for beginning in flipping houses. It will be very uncomfortable in a lot of the things you will need to do. Working with contractors, Realtors, buyers, sellers, other investors, etc., making low ball offers, worrying about whether you are making a good investment decision and so many other things. It will be uncomfortable, but will eventually become comfortable and you will succeed if only you push hard enough to work through it.

Please remember this. You must push through even though it feels like the biggest mountain you’ve ever climbed. Take it one step at a time and work through it.

Closed on The Flatulent House

Closed on the house I contracted mid week last week. From contract to close was a little over 48 hours. The title company worked fast and got the commitment within a day. All was clear and it was easy to close.

The name is a little crude I know. If you would like to find out why it is named as such, see last weeks post. No, it wasn’t me. 🙂

Details and pictures soon.

Moving Day Is Very Near

We put off moving for another week because we just had too much going on. My wife had called me while I was out and about and told me that she was stressing out about trying to move so soon. I myself was also stressing and realized that we were just doing it to ourselves. There was not much a reason to do it so soon. Patience. Don’t we all need more of it? She was willing to wait but was going along with it because I was pushing so hard to get moved so soon.

My wife usually knows the best thing to do in a lot of situations. She tells me about these correct decisions and I file them away and do as I was doing, only to make mistakes and come back to her idea that then works. Of course, I have to then claim the idea as my own. Drives her crazy. 🙂

Contractor Hired

Found a good contractor and got our contract signed. He is starting work on the Front Yard Stink Flip House on Monday. I found him at a house that was being rehabbed. He already works for 2 other investors and they are not keeping him busy. The thing that I liked most about him was that he was not trying to talk a big game. He didn’t seem to feel the need to convince me of how good he is. After some time working on the house, I will report how well it is working out.

Looking For More Contractors

Still looking for some more contractors to get bids and start work on the ‘Perp’ House and the ‘Front Yard Stink’ house. I’ve met some contractors and awaiting their bids. Hopefully I get another good one to start one of these soon so that I can then pick between that contractor and the one working on the ‘Honk Your Horn’ house for the remaining rehabs.

Marketing

Total Motivated Seller Leads This Week: 13

Lead Source Leads This Week Notes
Bandit Signs 0 Been about a months since some went up.
Yellow Pages 0 For a picture of my ad, visit the ‘The First Week’ post.
Buying Website 13 For a link to my site, visit the ‘The First Week’ post.
Drive For Dollars 0 Have not done this in a while.
Wholesale Deals 0 Made Offer
Absentee Owner Mailing 0 Have not mailed in a while.
Probate 0 Have not mailed for several weeks.
Craigslist 0 Just a basic ad saying we buy houses.

Total Leads To Date [432]
This is the total number of leads for each source since I started posting about the leads (late March 2011).

Lead Source Total Leads To Date
Buying Website: 231
Bandit Signs: 64
Yellow Pages Ad: 47
Absentee Owners: 29
Driving For Dollars: 17
Probate Letters: 11
Wholesalers: 11
REO Realtors: 7
Referrals: 7
Realtors: 3
Craigslist: 2
MLS Search: 2
For Sale By Owner: 1

Leads Analyzed

  1. Vacant And A Dump[Source: Website]

    Homeowner wants to sell a 2 bedroom, 1 bath, 900 sf house in a bad neighborhood.

    Here are the numbers:

    Asking Price: Make An Offer
    Amount Owed: $0
    Repairs: Everything (unconfirmed)
    After Repaired Value: $35,000
    Max Offer: Not For Me

    Seller has a house in a war zone and it needs a major rehab. Two things I don’t enjoy very much. I birddogged this one.

  2. Tired of Getting Ripped Off[Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1000 sf house in a not-so-good neighborhood.

    Here are the numbers:

    Asking Price: Make An Offer
    Amount Owed: $5,000 (back taxes)
    Repairs: a lot (unconfirmed)
    After Repaired Value: $60,000
    Max Offer: $35,000 – repairs

    House was vacant for a long time and somebody broke in and tore the place up and stole fixtures and other items. The sellers hired a contractor to fix it up and he just ran off with the money.

    Talk about a bad situation. These people are pretty motivated. I would go and contract this one for wholesale, but in the middle of this move, I decided to just birddog it. It’s not guaranteed that they will sell at a good price.

  3. Inherited and Just Want To Sell[Source: Website]

    Homeowner wants to sell a 2 bedroom, 2 bath, 1500 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price: $60,000
    Amount Owed: $0
    Repairs: Cosmetics (unconfirmed)
    After Repaired Value: $110,000
    Max Offer: $70,000 – repairs

    Seller inherited the house with his 3 other siblings. One lives in the house and is why I immediately asked if all were onboard with wanting to sell. They all are.

    The neighborhood is a quaint, historic district with stone cottages. We used to live near this area and know it well. Scheduled to see this one.

    Update: This one was a complete dump. The exterior stone walls are bulging out everywhere and the foundation is completely unlevel. This one would need probably about 40k in repairs and I am just not interested. They are getting 5 other offers so I am going to wait and see if anyone bites. I have my doubts.

  4. Buying New House[Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1500 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price: $63,000
    Amount Owed: $63,000
    Repairs: Cosmetics (unconfirmed – about 12k based on wholesaler pics)
    After Repaired Value: $95,000
    Max Offer: $50,000 (62k – 12k)

    Seller called saying that he has a new house under contract and a loan approved, but needs to sell his old house for the loan. He is willing to sell for what is owed.

    It turns out that I had already analyzed this property. That is the nice thing about the free lead manager real estate investing software. With all of the leads we get, I would have probably not remember even coming across this lead before.

    It turns out that a wholesaler called me about this property last month. I knew I still couldn’t make it work from the numbers and this allowed me to quickly move on the next one. I did call another investor to try and birddog this one though.

  5. Son Going To College[Source: Website]

    Homeowner wants to sell a 3 bedroom, 1.5 bath, 1000 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price: $62,000
    Amount Owed: $14,000
    Repairs: Cosmetics (unconfirmed)
    After Repaired Value: $72,000
    Max Offer: $45,000 – repairs

    Sellers have a son that is going to college and they need the cash. They currently let relatives rent the house but they have been “hit and miss” with their payments.

    They did not seem very motivated and so I told them I would probably be in the 40’s if it doesn’t require much in repairs. She immediately complained that that was way too low. I then asked what the absolute lowest they would accept and she mentioned 60k. No go.

  6. Another Lead From The Past[Source: Website]

    Homeowner wants to sell a 4 bedroom, 3 bath, 2700 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price: $212,000
    Amount Owed: $208,000
    Repairs: Cosmetics (unconfirmed)
    After Repaired Value: $205,000
    Max Offer: $133,000 – repairs

    This lead came through the website. When I entered it into the lead manager, I was informed that it already existed. They had contacted me through the website back in May about this property. Still can’t help because they still owe more than what it is worth and they are not behind on payments.

  7. Wife Died And Moving To Be With Family[Source: Website]

    Homeowner wants to sell a 4 bedroom, 2.5 bath, 3000 sf house in a decent neighborhood.

    Here are the numbers:

    Asking Price: $125,000
    Amount Owed: $0
    Repairs: Cosmetics (unconfirmed)
    After Repaired Value: $130,000
    Max Offer: $78,000 – repairs

    Seller moving out of town after the loss of his wife. The neighborhood values have been hit pretty hard by foreclosures. He was looking to get market value or more and I had to let him know where I would be roughly. He was not really interested in something that low but said he was glad I could get back to him so fast and that he will keep me in mind. I will also follow up with him because he could become more motivated to move quickly. The market has just been hit too hard in that area.

  8. Hoping For The Impossible[Source: Website]

    Homeowner wants to sell a 4 bedroom, 2.5 bath, 3000 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price: $230,000
    Amount Owed: $210,000
    Repairs: nothing (unconfirmed)
    After Repaired Value: $230,000
    Max Offer: $150,000 – repairs

    House is listed and has been listed for a while. They have price changed it and even changed Realtors. They were hoping that I would pay cash and close quickly at market value. Sorry, we don’t do that.

  9. Owes Too Much, Asking Too Much[Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1400 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price: $115,000
    Amount Owed: $100,000
    Repairs: back door (unconfirmed)
    After Repaired Value: $90,000
    Max Offer: $58,000 – repairs

    House values have dropped in this neighborhood and far too much is owed and being asked for. Cannot even come close.

  10. House Too Far Out of Town[Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1500 sf house out of town.

    Here are the numbers:

    Asking Price: $40,000
    Amount Owed: $0
    Repairs: a lot (unconfirmed)
    After Repaired Value: $60,000
    Max Offer: $35,000 – repairs

    This seller bought the house with intentions of fixing it up and selling it. It is too far out of town for me to bother with it and so I sent the lead to another investor. The seller doesn’t owe anything and I’m sure a deal can probably be made.

  11. Four Properties[Source: Website]

    Seller wants to sell 4 separate properties. Two are multi-unit, one is single-family and one is commercial. She wants offers made on each and told me what she owes on each. Going through them I quickly saw that what is owed is just too much anyway. Only the commercial one may have some potential, but I just don’t have time for it right now and I just don’t do commercial. Passed this one on to another investor.

  12. Had To Put Grandmother In Nursing Home[Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1100 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price: Make An Offer
    Amount Owed: $0
    Repairs: unknown (unconfirmed)
    After Repaired Value: $70,000
    Max Offer: $45,000 – repairs

    Seller had to put his grandmother in a nursing home and is helping to sell her house. The neighborhood is not one that I am interested in (at least not interested enough in being that we are busy with the move over the next couple of days) so I sent it to another investor to investigate.

  13. Move Closer To Mom For Childcare[Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1200 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price: $126,000
    Amount Owed: $120,000
    Repairs: none (unconfirmed)
    After Repaired Value: $120,000
    Max Offer: $78,000 – repairs

    House was just built a couple years ago and they do not seem to have a very motivating situation. Besides, too much is owed. There will be more, rest assured.

Summary

Busy with the move still. Hopefully we will be settled enough at the new house to be able to post details about the houses we recently acquired. Stay tuned.

Leads all came from website mainly because I been intentionally not doing a lot of marketing since I wouldn’t be able to handle too many leads this last couple of weeks.

Plans For Next Week

  • Move.
  • Start picking up marketing again.
  • Get more contractors started and/or work at wholesaling some houses.

Please ReTweet and Like this post because it’s the nice thing to do and I truly appreciate it.

-Danny

“Risk comes from not knowing what you’re doing..” – Warren Buffet

Thank you for following along with us on our adventures in flipping houses. We hope you are enjoying it and that it is helping you to learn how to flip houses or improve your house flipping business, whatever the case may be.

  •  
  •  
  •  
  •  
  •  
  •  
  •   

Share

Comments (19)

  • Donovan

    Do you ever try to refer leads to agents? I have a (gentleman’s) agreement with a few agents that any listing I refer that they close they’ll cut me $500. Most of the leads I refer are Short Sales, not something I care to deal with! This month I referred a land lord to an agent with 18 Properties he want’s to liquidate. All the houses were not in an area that I’m not really interested in. The agent is in the process of selling them a few at a time. Cha-ching!

    • Danny Johnson

      Donovan,

      No, I do not. There are some leads that this would work with, but I’ve always felt that they are calling because they want a quick sale. Guess, if I can’t provide it, I could at least give them a referral to a good agent to help them sell. Thanks.

      • Donovan

        Yea everyone wants a quick sale and at their asking price! haha. I know I get a lot of short sale leads and they usually don’t have any other options. I take pleasure in being able to refer them to someone who can help them if I can’t. I’ve done 4 referrals already this month, I always ask their permission first.

  • TimeFreedom

    Dan, please be careful with the aerobatics. Don’t mean to sound weird or anything just want you to be cautious. You have a lot going for yourself and I don’t want you in harms way. I know your probably thinking “who is this wacko”, but that’s just how I feel.

    Best regards

    • Danny Johnson

      Mr. Freedom,

      I do appreciate the concern. Safety is a definite priority when flying, even if not doing aerobatics. My instructor and I take it very seriously.

  • ed

    Hey Danny, I’ve read most of your posts since you’ve started ramping up this year. Excellent reads and super motivating. I’m just starting out and you spoke directly to me on the level of comfort and the need to break free from it. I sit in amazement at your level of ability in flipping homes and it’s helpful to remember everyone started out knowing nothing and the ones who succeeded are those who left the comfort zone behind. Great post.
    Also, have you ever thought about an additional column on your stat charts to identify the deals that you do buy and what source/marketing it came from? Might be helpful to see after a year of flipping where the closed deals actually were generated from.

    All the best, Ed

    • Danny Johnson

      Thanks a lot, Ed.

      Sorry it took a while to respond. Just getting the office back going after the move to the new house.

      I have considered adding that to the stats and will do soon.

  • Ken L

    Danny,
    Thank-you so much for being open here about your leads and deals. So refreshing to actually have somebody post the good, bad, and ugly of flipping. Here is what I posted in BP forum but it said I had to upgrade my account and pay to post. . . 🙁 Anyway, here it is. Any help is appreciated:

    I am a moderately experienced flipper with 3 under my belt (really only 2 as I live in the third rehabbed property 😉

    I have about 10K in savings but will need a HML and am having a terrible time finding a reputable, honest, and upfront one! Where did they all go?!? I would like to start on another property and have a business plan, exit plan, rehab plan, and everything else in line. I just can’t seem to find somebody that can finance the deal. Last time I went through BOA but had to put 20% down which wiped my liquid funds out so I put everything on credit card and paid off everything when it sold in 2 weeks.

    Anyway, anybody have any suggestions on where to start?
    -Ken Lavertu

    • Danny Johnson

      Have you seen my article on working with private lenders?

      Finding and Working With Private Money Lenders

      You have the advantage of having some experience. Private lenders should be a lot more willing to work with you. Take the time to find them and you will be glad you did for years to come.

  • Ken L

    Oh, and I did read your article on HML’s earlier. . .but am still having a hard time finding somebody!

    • Danny Johnson

      Just saw this…right after I asked if you had read it.

      Have you looked for other properties bought by investors and tried to see who they borrowed money from. Get some names and addresses and look for their phone numbers online. Call them. Mail them.

      Drive neighborhoods you are investing in and write down addresses of houses being rehabbed and see if the investor borrowed money. This is going to take some work, persistence and, most importantly, patience.

  • Bryce

    Hi Danny,

    About how many hours do you and your wife put in each week? What about when you first started flipping?

    I see you occasionally post some leads from wholesalers, but I don’t recall seeing a birddog lead. Do you have a team of wholesalers and birddogers scouting properties for you?

    From an investor standpoint, do you prefer wholesale or birddog leads? It seems to me that there is more money to be made in birddog leads as the work involved and therefore the birddoger’s cut is less. However, with wholesale leads you are not really pressed to act fast since the property is already under contract. Is this about right? Anything to add?

    Thank you!

    • Danny Johnson

      Bryce,

      It’s hard to say. We work a full week right now but it is mixed in with doing things with our family (taking kids to school, dance classes, volleyball practice and games, meeting people for lunch etc. ) I guess I don’t really look at it as work (maybe just working with the contractors is work :)).

      When we started we were part time and both working full time jobs. I was putting in about 10-20 hours a week.

      I don’t have teams of wholesalers or birddogs. I do get the occasional birddog lead and wholesale but they are usually not good deals.

      With any lead you should act fast. You will have competition and if you show a wholesaler or birddogger that you work fast and can act, you will get more leads.

  • Bilgefisher

    Danny,

    So true on causing our own burdens. Moves seem to be far more stressful for the gals then the guys. Most of us guys could live out of a gym bag if we had to. Its wise to listen to the wife though, or else we might have to live out of that gym bag lol.

    Good luck on the move, I know how distracting it can be to the business and life.

    Jason

    • Danny Johnson

      Thanks, Jason.

      It’s hard for me to not have everything in its place. Boxes everywhere and calls and emails going unanswered as we focus on getting things done. We are almost there. Just a couple more days and we should be reasonably settled.

  • Don

    To upgrade, or not to upgrade.
    How do you decide if you need upgrade (modernize) the appearance?

    On my next deal, the Kitchen looks out of date, maybe fromt he 80s. As a rental, I would just make minor repairs and rent it this way. But if I am going to flip it, should I upgrade the kitchen?

    This adds a lot to my cost, and i am not sure how important it is.

    I already have an apprasial and they say it is 80k with my repairs, which were not upgrades.

    Should an upgrade bring more money? Or will it not likely sell for near the appraised value if I don’t upgrade.

    Thanks for your help.

    • Danny Johnson

      It really depends on your competition. What do the other houses that are for sale in the area and price point have?

      Sometimes I will just do a quick and cheap update by painting the cabinets, changing the hardware and refinishing the countertops (if you don’t have a countertop re-finishers you need to find one asap). Doing those things can go a long way.

  • Kelly

    Danny…I know that you are doing this to keep YOURSELF accountable however you are doing SO MUCH for SO MANY people by doing this! I’m sure that others appreciate the time that you take to post all of this as much as I do! I am just getting started I am gathering as much information as I can before I jump in so I don’t make a costly mistake. As your quoted from Warren Buffet “Risk comes from not knowing what you’re doing” The information that you are providing us with, “AT NO COST” (THAT’S AMAZING) THANK YOU!!!! You just told Don that if he didn’t have a counter top re-finisher that he needed to get one asap. What kind of refinishing do they do (paint it or re-laminate it) also where do you look for one, what kind of questions do you ask to be sure they will do a good job?

    • Danny Johnson

      Thanks, Kelly.

      They paint the countertops. The guy I use makes it look like granite (nothing real fancy, just specks of colors). Ask other investors in your area. This is a contractor that they are not keeping busy anyway and should be willing to share. You could also do a google search for them. If nothing comes up, search for bathtub refinisher in your area and see if they also do counters (my guy also does tubs and sinks – white of course).

      The best way to know if their work is good is to ask to see a job they’ve recently completed. As far as prices goes, we are paying about $150 for kitchen counters and $75 per bathroom vanity top. A lot of older houses had custom avocado green laminate counters and it is much cheaper to paint them than to pay for new custom ones or work-arounds.

Leave a Reply to ed Cancel reply

Latest Posts

34 Weeks Flipping Houses