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Today is the final episode with my very good friend, Sandy Smith. We’re going to hear about her experience as a house flipper and a landlord…she has some really interesting stories for us! We’ll hear about the time she had to kick a tenant out and almost lost the house to the city! If you are curious about investing in real estate, you won’t want to miss today’s episode. Sandy’s going to drop some real gems of wisdom on us, so tune in now!
What We’re Chatting About This Week
Getting profitable with real estate investing isn’t always easy. If you want to get into long-term real estate investing, there is a lot you need to know. Sandy is quite experienced in this area, and she’s going to share her 5 lessons learned becoming a house-flipping landlord!
Look For a Good Deal
Don’t just get hung up on the location, size, or design of the house. Maybe you’re paying a little more, but the house is updated and ready to go. Maybe you’re getting a real bargain, but you need to fix it up quite a bit. The bottom line is, make sure the dollars make sense for what you’re getting. You also have to negotiate, don’t just buy at asking price.
Don’t Be Emotional
Don’t get fooled by those house flipping shows on HGTV. Also, don’t get too attached to any house, especially if you’re not the one who will be living in it. Business is business. If you have tenants that are messing around and not paying rent, don’t hesistate to kick them out! If you listen to tenants’ sob stories, you could end up losing the house if they don’t pay rent!
Have the Right Team in Place
Having the wrong team can cost you a lot of time, money, and energy. Sandy once had to fire a contractor that cost her $30,000 and six months’ worth of time! She learned first hand how having the right team is super important. No one cares more about your money than you, so if they don’t respect you and your money, fire them.
Make Sure You Have Enough Capital
It’s easy to underestimate the cost of everything. Whatever you think it’s going to cost, add 15-20% to that number. Even double that number just to be safe! So if you think you need $100,000 to fix up that house, have $200,000 on hand just in case something goes wrong.
If you’re interested in using your IRA to invest in real estate, check out Rocketdollar!
Screen, Screen, Screen Your Tenants
The person who is most likely to damage your property is your tenant. That’s why screening for the right tenant is extremely important (again, don’t involve your emotions!). Sandy once evicted tenants because they were selling meth and crack out of her house. Not only that, but she was told the town had the ability to seize her house because of her tenants selling drugs out of it! This is only one out of many horror stories she has, so learn from her experiences.
This Week’s Guest
Hi, I’m Sandy.
Way back when the dinosaurs roamed at the end of 2008, I started paying a little bit more attention to my debt. As the year faded into 2009, the idea to build a website to keep myself accountable to eliminating my debt burst into my mind. I hopped onto Blogger.com and created a blog that I named My Cheapass Blog. I really didn’t begin my blog for anyone else to see; it was just a way for me to have the total amount that I owed at my fingertips. Here we are years later and have learned enough to help others with their own debt.
I started this blog with well over $105,665.31 in debt after a failed business and some massive student loans…at least, that’s what I said that I owed. In actuality I owed a friend another $5,000 and I would receive a notice in the mail that I owed $10,000 in back taxes and penalties. This blog has been a chronicle of my journey of getting out of it without filing bankruptcy.
My $120,665.31 debt represented everything that I had done wrong. Now, I am here to help YOU get your finances together.
Other Resources Mentioned
This post was originally published on October 24, 2018 and updated on March 25, 2021.
2 thoughts on “PPP124: 5 Lessons Learned Becoming a House Flipping Landlord”
One key to any property investment is to make sure that you do your sums properly and visit the property before purchasing. You have no idea how many people make a property purchase at an auction without reading the legals or without even having visited the property!
So true! I have bought sight unseen before and it’s not recommended unless you’re a serious gambler with deep pockets!
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