Investors flipping houses need a continuous supply of houses to flip to stay in business. The better we become at finding motivated sellers, the faster our business will grow. But, whether you are a new investor or a seasoned investor, your mindset has more to do with the number of deals you find than you may realize.
What It Feels Like to New Investors – Deals are Scarce!
When we first started flipping houses, we spent over nine months learning the business before we found our first deal. We even said the words aloud, “Seems like there aren’t very many deals in our area.”
Part of learning and practicing our craft was touring homes, calculating repairs and the selling price after repairs (ARV), then calculating the best price we can offer and still make money. We toured over 130 houses in that first nine months, making offers on at least a third of those, maybe closer to one half of those.
As new investors, we partnered with friends who were new Realtors. We still laugh together about some of the things we saw and experienced during those years, but we all agree, we both became very good at our crafts.
What It Feels Like to Seasoned Investors – So Many Deals to Choose From!
New investors probably won’t believe me, but we now know there are more than enough deals for everyone. But, we also know we couldn’t find these deals when we were new at this, and it’s all part of learning and practicing your craft.
We learned so much in our first flip in the historic district of Little Rock. And, completing this project set us up to succeed in this business. Once we developed our team of contractors and private money lenders, it was easier to find those deals.
The truth is, it’s hard to calculate repairs without your contractor’s help. Your repair calculation will always be high, until you learn what your contractor charges for everything. And, having private money lenders ready to fund your next project is a confidence builder.
Last, since you’ve been practicing your craft continually, learning tricks from other investors, you learn there are lots of ways to make a deal. When you do that, you realize all the deals you could have made that first year, and suddenly you see deals everywhere.
Three Tips to Abundance
1. Learn Your Craft, Practice Your Craft:
Embrace these early days of learning. Get a coach to keep you moving forward. Talk to seasoned investors, and do what they say to grow your business. Ask a seasoned investor to tour a property with you. You’ll see how their repair estimates differs from yours, and yours will improve!
A fellow investor, ahead of us by a year or two, said, “See enough houses to make five offers per week, and I promise you’ll have your first house in a month.” Lots of investors heard that webinar, and I don’t know how many of them followed that advice. We did, and we had our first deal in one month.
2. Develop Your Team of Contractors and Private Money Lenders
Most contractors won’t want to tour every house with you, just the one you have under contract to buy. Time is money, and they need their quotes to lead to work. Once you have a property under contract, prepare your scope of work – everything you plan to do in this house.
Call 3 – 4 contractors to tour the property all at one time. Hand each of them your scope of work, and walk them through the project room by room. Ask them for an itemized quote within three days. Once you have those quotes, you’ll know exactly what it will cost and whether you can make money with this project or not. If not, cancel the contract during the inspection period. If so, you now need money to close the deal.
With your purchase price under contract, a good ARV calculated, and quotes from contractors, you can speak to potential hard money lenders and private money lenders. Someone will be willing to work with you. Your first deal is riskier than future deals, so your cost of money will be highest that time. But, every future deal, the cost of money will decrease.
3. Believe in Abundance
Your mindset will attract deals or repel deals. If you say, “We’ll never find a deal” or “There just aren’t any deals in our area”, that’s exactly what you will find. Your words have power, and these words will produce … yep, the results you just predicted with those words.
We love helping new investors now, because we believe and we say, “There’s enough business for everyone in our market.” Practice saying these words, “As I do my part touring homes and making offers, lots of deals will be mine.” Then do the hard work to make it happen.
The Scarcity mindset produces an environment of scarcity. You won’t find deals, you won’t find contractors and you won’t find private money lenders.
The Abundance mindset produces Abundance! More deals will come your way than you think you can ever do. Contractors will be calling you. Private money lenders will line up to do business with you. Banks will mail you keys to properties they want to sell fast. Realtors will call you first when they get a listing they don’t even want to take pictures of.
These three tips will get you from your starting point to your first deal and beyond. Seriously, just don’t give up. Decide to expect great things to happen. Then put in the hard work to learn and make it happen. There are more than enough deals for everyone.