4 People You Think Know How to Fix and Flip Houses That Really Don’t
It’s not that I don’t like cats.
I mean what’s not to love about a pretentious, ungrateful animal that poops inside your house and sleeps 20 hours a day? Sounds a lot like a few roommates I had back in college.
A few years ago, my wife noticed a lump on the side of her cat, Nala. After an expensive visit to the vet, we learned our little feline had a cancerous tumor.
Much to my surprise, our vet didn’t know how to treat it. We’d have to bring Nala to a “specialist”. It turns out a cat oncologist would have to operate, and that the procedure included chemo and radiation. All this could be done for $8,500, and it would only prolong her life by 12-18 months.
So, I asked the doctor a very reasonable question…
“How long will Nala live if we don’t do this procedure?” He told me about 10-12 months. At that moment, two thoughts popped into my head…
First, what person in their right mind would shell out that kind of cash to keep a cat alive an extra six months? Second, there must be people willing to pay this kind of cash to heal their pets; otherwise there would be no cat oncologists.
A World Full of Specialists
I guess it shouldn’t be all that shocking to learn a vet doesn’t know how to operate on a cat. After all, we live in a world full of specialists.
Think about it…
How many different types of auto mechanics are there? There are repair shops that specialize in transmissions, foreign cars, sports cars, and brakes. Just because a mechanic knows how to rotate the tires on your SUV doesn’t mean he can replace your broken starter motor.
And in the real estate industry, it’s no different.
There are four people working in the business you may think know how fix and flip a house that really don’t:
Real Estate Investment Gurus
Realtors are salespeople and their primary focus is lead generation. If they don’t have clients (homebuyers and home sellers) then they don’t get paid. Even the best I know struggle with market analysis, and few have any idea how much it really costs or how long it takes to remodel a home.
Like Realtors, wholesalers are also salespeople. Many of them lack the cash, vision, experience or patience required to fix and flip a house. So, they choose to deal directly with distressed property sellers instead. It’s not uncommon for a wholesaler to overestimate the after repair value of a home, and underestimate the repairs when marketing their deals to cash buyers.
Few general contractors are ever hired to remodel an entire house. Most of the time, they’re brought in to rehab a kitchen or master bathroom. Taking on the task of fixing up a home from basement to roof requires excellent time, money and people management skills. Communication is vital to meeting your deadline and budget. Unfortunately, many of these traits aren’t in the contractor’s DNA. We’ve hired and fired countless general contractors because they couldn’t handle managing the entire project.
Real Estate Investment Gurus
The next time you attend a real estate investment webinar, seminar, class, or workshop, asked the speaker about the last house he or she FIXED AND FLIPPED.
There are plenty of real estate investment gurus out there teaching people how to flip houses (i.e. wholesaling), but few know how to fix and flip a house.
Most real estate investment gurus, like wholesalers, don’t possess the experience needed. And like Realtors, they’re salespeople. Their income is generated primarily from selling their educational products.
Of course, there’s nothing wrong with that.
However, it’s important that you find out how much the guru can really teach you about fixing and flipping houses before you buy one of their programs.
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You Don’t Know, Until You Know
Here’s the worst part…
It’s unlikely any of these people will admit to you that they don’t know how to fix and flip a house. And, by the time you find out it’s too late.
That said Realtors, wholesalers and contractors are an important part of your team. You just don’t want to rely on them to call the plays. Remember, they are the specialists.
Kind of like my cat oncologist.
Sadly, Nala died about 11 months after her cancer diagnosis. However, for just $40 she was replaced by my wife’s new, even more pretentious and ungrateful cat that poops inside our house and sleeps 20 hours a day.
What’s not like about that right?