This man was going through a very stressful experience.
Behind on his mortgage payment and facing foreclosure, no doubt he’d already received dozens of phone calls from his lender. Followed by an endless stream of letters from distressed property buyers offering to pay cash for his house.
So when I knocked on his door and asked if he was interested in selling his home, his rage quickly brimmed to the surface.
“Where’s your bank?” he asked.
Before I could reply he said, “If you can really pay cash for my house, then let’s go to your bank right now!”
I sheepishly answered, “Bank of America”.
Then, practically spitting the words he shouted, “Bullshit, you don’t have a pot to piss in, because if you did you wouldn’t be driving that piece of shit!”
He was referring to the 1995 Honda Accord I pulled up in, which was parked on the street in front of his house.
House Flipping vs. Fixing and Flipping Houses
That was 14 years ago.
New to the distressed property buying business, and short on cash, I got my start knocking on the doors of homeowners in foreclosure.
Every weekend, I’d visit 60-80 properties in my beat up Honda. Most people didn’t come to the door at all, the ones that did usually slammed it on my face. And, every once in a while I’d encounter a homeowner with smoke coming out of their ears.
It was an incredibly educational experience.
Sure, I made a few bucks. But eventually, I learned that I suck at house flipping. Not only did I suck at it, I hated it too.
You see, there’s a HUGE difference between house flipping and fixing and flipping houses. Each endeavor requires a totally different skill set. Depending on your personality, it’s likely you may not be cut out for both.
House Flippers (Wholesalers)
Most of the successful house flippers (wholesalers) I know are incredible salespeople. They spend thousands on direct mail, website traffic and marketing.
When they get a distressed property lead they’re quick to respond and follow up constantly. The tactics they use to lock a deal up are aggressive, mainly because the wholesaling business is extremely competitive.
You can bet that when they get a property under contract they’ll use a scarcity-type marketing strategy to find a cash buyer. Their email blast will include language like “this deal won’t last long” or “must close quickly”.
Fixing and Flipping Houses
After about two years of hearing “no” all too often, and losing deals to more aggressive doorknockers, I realized I didn’t like wholesaling. Basically, it was a sales job and I just wasn’t much of a salesman.
I made up my mind I wasn’t going to deal directly with homeowners in distress any more. Instead, I built a network of wholesalers and Realtors to bring me deals that I could fix and flip. Then, I focused on what I do best (and love), which is transforming houses and neighborhoods.
You see, the professional fix and flip investor is more project and people manager than salesperson (wholesaler). Both roles are challenging, and at times can be difficult.
The path you choose may depend on your situation.
I had no choice but to start out as a wholesaler because I lacked the cash and education required to fix and flip houses. But, once I had enough experience and funding I shifted my attention to rehabbing.
I also sold the Honda Accord. It really was a piece of excrement.