Verify The Scope Of Work

Now that you know what everything will cost, sort-of, and you are sure of your figures, you may want to reconsider some of the aspects you originally thought would be possible. Do not be reluctant to reduce the scope of work to match your available cash for the work so you can produce the gross profit you need to make the project worthwhile.

This is a difficult process. You may not get the slab granite counter tops you prefer, and have to settle for Formica. You may not get hard wood floors, and have to settle for carpeting.

But remember, you are not going to live in this house. You are selling it for a profit. Let the new owners perform some of the improvements as their money and time allows. Be satisfied with your profit and move on to the next flip.

Expect each flip to be slightly easier to complete than the last. Well, that is, better until that bad flip shows up in the sequence where you break even and can't wait to get out from under it. That will happen if you are at this long enough.

Mine was an $80,000 property which I worked on for eighteen months in my spare time while holding a full time job. I put cash into the project all along. Then when it came time for the balloon payment, I had to get out from under and sold for $80,000 paid to the loan holders. I cleared nothing from the transaction except that I lived there rent free for the eighteen months. It was not worth it. I still have scars.