As the speaker, slickly dressed in a dark blue suit and matching tie, addressed the half-full room I could feel the sales pitch rapidly approaching.
I recall looking around at the attendees.
Could any of them really afford the real estate investment program this guy at the front of the hotel conference room was about to sell?
Then I started wondering…
How many of the people in this room can even afford to pay their monthly electric bill?
And then, maybe that’s why they’re all here in the first place?
Selling the Dream
Real estate investment gurus and education companies, in about every large city in the country, hold meetings like the one I just described all the time. They prey on people with little or no cash and low paying jobs, selling the dream of financial freedom and fat bank accounts.
Make no mistake…
You can get rich fixing and flipping houses. However, it’s not a “get rich quick” strategy.
Heck, it’s not even a “make ends meet quick” strategy.
I recently met with a guy interested in signing up for coaching program. A few days later, I received a friendly email from him explaining that he enjoyed meeting me, but that he couldn’t afford to join.
According to the prospective student, he was short on cash. It seems he quit his job because he thought he had the real estate investing thing all figured out. But, he hadn’t made any money after six months of trying to find a deal.
I explained to him that even if he found a profitable fix and flip deal immediately, it would take 4-6 months to see his first check. After all, the typical rehab takes about two months to finish, and another 30-60 days to sell.
You MUST Have This to Succeed at Fixing and Flipping Houses
I was lucky. When I quit my job in 2002 to start real estate investing full-time, I had a Sugar Mama.
What’s a Sugar Mama?
Well for me, it was my wife. She had a high paying job that supported us both while I figured out the fix and flip business. I didn’t have to worry about finding a deal right away to pay the bills. And, I certainly didn’t have to do anything desperate (dumb).
The bottom line is you MUST have an alternative source of income, or cash reserves, BEFORE you can start fixing and flipping houses.
If you need immediate cash because you’re out of work, fixing and flipping houses will not solve your problem.
If you have a low paying job that doesn’t cover all your bills, fixing and flipping houses will not solve your problem.
In order for you to succeed, you MUST have some basic financial security. That means enough income to cover all your bills.
Keep in mind, I didn’t say you have to have a lot of cash saved up to purchase and rehab a property.