Around the late ’90s, I began hearing that anyone could fix and flip a house for profit. A person could live in the house and fix it up to sell it. Then, repeat the whole process. It didn’t work. In fact, it became my failed fix and flip venture. It’s sad, but live and learn I guess. Here’s hoping my failure can be a way to avoid this yourself so you can actually profit. So there was this house on over two acres of property. It was run down, had not been lived in for over eight years, but it had serious potential to be the perfect fix and flip. It had good bones, and the property was set to be more valuable as time went on. I proceeded to go for it. While all of that was great, there were these few mistakes that made it a failed fix and flip.
My fail was to try this with a partner. That person was not holding up his end of the plan, and was not a good partner for any venture, especially for a fix and flip. These projects take time and must be done right. It’s the only way it can succeed. The time frame on this way to make money is set and specific. Anyone who changes that is loosing money. That is exactly what happened. It was a disaster. Still, it doesn’t mean that I wouldn’t try it again.
When my partner and I first started out, there was a loan taken to cover the whole thing. An evaluation was given for the profit, verses the investment. The return to the investor was supposed to be substantial. Everyone in the process would come out with a nice profit to use on reinvestment on another place, or to just pay cash for a home. That would have been the case if the timeline was maintained. Unfortunately, the way the money was taken out, the timeline caused us to end up upside-down.
The final aspect which became an issue was just the staff hired to fix things. Had the work been done on schedule, then it would have been kept on the timeline to make us a profit. As it turned out though, we got behind and it never was able to catch up.
What I would next time is obvious. To prevent my failed fix and flip outcome, I would find a better partner, or just handle it now with my soon-to-be spouse. Partner’s are great, but it should have been handled more by myself in order to keep it all on track. Anyone that is looking to do this for profit must allow themselves the chance to manage the staff, money and the time, so the whole fix and flip is not a fail, but a success.