I’ve definitely learned a few truths that would have been helpful early in my real estate investing business. I flipped my first property back in 2008. And in 2013, moved into real estate investing and house flipping full-time. It is still my primary business, by and large.
I’m going to hit five points that hopefully will trigger something for you. I’ll talk a little bit about what my challenge was with each of these points, why I wish I would’ve known them sooner now, what I wish I would’ve done differently, and what maybe you can do now to position yourself so that this isn’t something that you wish you knew sooner. It’s something that you can actually start to put into practice for yourself right now.
1: Sought Out Funding Sooner
I first started in 2007 and got my first flip under contract in 2008. For that first project, I used a traditional 30-year mortgage to purchase the property (something I wouldn’t recommend since flips are a short-term purchase). I took a loan out from my 401k, and I also wrote myself a cash advance check for $20,000 from a credit card, which was my capital for renovations.
At that time, I was extremely inexperienced and had no connections. I went to a few banks and local lenders, and nobody was interested in lending to somebody doing a flip. I was told it was due to my lack of experience or track record, and the market at the time.
Without the funding that I was established with, that I was then providing proof of success with, it delayed that process a little bit longer for me to get those relationships where I could work with a bank.
Another funding route is OPM, which means “other people’s money.” At the time, I didn’t have a network where that was an option. Not to mention, I wasn’t exactly full of confidence in myself and the project enough to feel comfortable reaching out to others.
This is all to say; when you want to do this, don’t delay the funding piece. Don’t delay talking with people about what you want to do. Don’t delay talking to people who may have capital that they’re looking to invest. Do not delay in having conversations with lenders who support entrepreneurs and the type of business that you want to build.
You never know how much capital you’re going to need, don’t delay!
2: Found a Mentor
If I could go back, I would have been more insistent on finding a mentor when I got started. At that time, I didn’t have a partner with any experience and didn’t have any connections in the business. I didn’t know anything about real estate or construction. I was flying blind.
I wish I had found a mentor with a business like the one I wanted to build. And when I say “one I wanted to build,” it’s because there are a lot of different business models in the real estate investment business.
Depending on your goals, you’ll choose between people who focus on multi-family, renters, refinancers, the list goes on. There are tons of awesome real estate investors to learn from, but be especially careful to choose someone with the business you want.
I wanted to work in very specific areas where inventory was traditionally older homes with a lot of potential in desirable areas. That was a relatively niche model, so finding a mentor who was doing that wasn’t easy. When I was getting started I knew people who were very much cosmetic fix and flippers, which didn’t align with me.
Another differentiating piece of the business is beliefs with financing. Finding a mentor who had the same beliefs there as well was difficult. I wish I spent more time looking for someone who was on the same path as me.
While it can be difficult to find someone who lines up with your goals, beliefs, and business structure, it’s not impossible.
3: Fully Understood that Real Estate Investing is Entrepreneurship
When you invest in real estate, own rental properties, or flip houses… You’re an entrepreneur. You’re a business owner! You’re not somebody that just has kind of a “side thing.” Even though you may only do a couple of houses a year, you’re still an entrepreneur.
There’s a legitimacy that we think of when we think of entrepreneurs and business owners, that sometimes people don’t recognize or elevate as they should when it comes to real estate investing. Many people think real estate investing is either more passive, where you’re just getting a return on money, or they think something might not be on the “up and up.”
As you know, most of the time those perceptions are inaccurate. Usually real estate investors are very active and are very involved. There is so much involved in running your business, from marketing to hiring to designing and selling.
At the end of the day, it doesn’t matter what others think about your business, but what you think will make all the difference. Switch your mindset and give yourself the credit.
Realizing and working as you’re an entrepreneur or business owner helps you to think bigger and longer term. This will only expand your horizons!
4: Networked Sooner and More Often
Another lesson I wish I would’ve learned sooner (and I’m still working on this) is networking sooner and more often! Truthfully, it’s not easy to find people who do what you do, but there are ways, and you should take the time for it.
The first five or six years at the start of my business, I was working a full-time job and raising children. That was a lot going on with a limited amount of time, and often real estate events and networking activities would be put on the back burner.
It was also very intimidating to attend some of the meetings. I didn’t know anybody, I couldn’t find anyone doing what I wanted to do specifically, and lastly, some others’ reputations preceded them.
When you’re committed to building your network and find a few hours a month for meetings, you can find the support and inspiration, and even mentorship you’re looking for. Think outside the box, look for meetings outside your usual proximity, or look online.
Without networking events, I wouldn’t have met lenders, stagers, and other vendors. It also opens the door to refer others and for them to refer to you! So much can come from a solid network!
5: Understood that with all the ways to make money in real estate, not all will be a fit for me and my goals (and that’s ok)
Finally, the last thing I wish I had known sooner, is that there are a hundred-plus ways to make money in real estate, and I don’t have to do any of them if I don’t want to. One of the most common things people seem to get stuck in when it comes to their thought process with real estate investing is that they can’t move forward with any one thing until they understand how everything works.
I was that way as well, to an extent. You don’t have to know how everything works to get started. Focus on one thing. By focusing on house flipping, I was able to learn all I needed to learn about flipping. While doing that, I learned about other things as I went along on projects. For example, I learned peripheral lessons about construction, finding contractors, negotiating bids and timelines, working with cities, and more.
You’ll never have all the scenarios play out for you to be prepared for them. You’re also never going to find out how to react and handle them in real time if you don’t expose yourself to the opportunity to experience it. That’s why it’s essential not to wait!
Many anxious aspiring flippers come to me saying they’ll wait until XYZ happens. Do not wait. Do your due diligence, find what numbers and timelines work for you, find what you can handle, and go for it.
Take These Truths and Run
Those are the five things I wish I had known sooner. My business is successful now, but we all start somewhere. I didn’t let the unknown stop me, and you shouldn’t, either. Take in the information you can, but know that you’ll never internalize it. Build your network and don’t delay any part of the process.
Are You Ready?
I have the perfect place to start! Check out my Find my Flip course.
I also have some resources I’ve put together to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home.
There are several videos on finding houses, renovations, and funding on YouTube. Check out your favorite flipping topics and new videos weekly!