If you’re new to the investment or house flipping space, and you haven’t closed a deal yet, you aren’t alone.
You may be wondering how it’ll go.
Will it be smooth and seamless, like it sounds when you listen to professionals talk about it? Will it be a nightmare? Will you be nervous, or excited?
It would be nice to hear about the experience other first-timer’s had, so you could learn from them, or set your expectations a little better, right?
Well, now you can.
Here are the stories of a handful of investors, and a summary of what you can expect when closing your first deal.
It can go perfectly.
Sometimes it just goes well. And when it does, it makes you feel like “wow, this really works!” and “I can do it again!”.
No hitches, no problems… it all goes according to plan.
If you hope to have this experience for your first purchase, it would be worth noting that for Shelly and Tyler, education played a large part.
If you take the time to learn:
- From others who have gone on before you,
- How to properly evaluate a home’s current worth;
- What potential damages/expenses to look for;
- How to evaluate the current housing market in your city;
- How to talk to clients, listen, and help them solve their problem;
Then you stand a much better chance of having a really smooth, profitable first purchase. Of course, everything needs to be learned on the job, and you’re bound to make mistakes here and there, but this “pre-deal education” will go a long way.
Successful closes depend, in large part, on your commitment to “become the expert” in your market. That means knowing the local housing market, knowing current costs for certain rehabs/construction projects, and knowing your ROI numbers.
Your first deal can actually be profitable.
Now, I know that sounds obvious – or at least, what everyone reading this is probably hoping for, but it’s not always the case.
Lots of investors buy too high; get their rehab estimates wrong; miss something in the walk-through that’s going to cost them later; or any other number of things that can hurt profit.
So profit on your first deal is by no means a guarantee. However, your first close can make you money.
If the thought of buying a home “sight unseen” makes your palms sweaty and your heartbeat a little faster, you aren’t alone. It can be a huge gamble if it turns out to be in worse condition than you thought.
In this case, it worked out.
It will be a mix of fun, excitement, and stress.
So let’s say you’ve done your homework and educated yourself on the process, how to price and value things, and you’re ready to go.
The truth is, you’ll still need hands-on experience.
In other words, there does come a point when you need to put the books and online courses down, and turn the podcasts off, and make an offer. When that time comes, you’re going to learn in a whole different way.
You’ll get to live it. Practice it.
OK, so a few notes from this one – because it’s full of great advice and takeaways…
- As I mentioned earlier, there comes a time when book smarts aren’t enough, and it’s time to learn by doing. When this happens, anything can happen.
- Profit is not a guarantee, especially not the profit you intended on.
- It’s crucial to have a solid team around you. That was one of Keith’s big takeaways – that he had a trustworthy team, who could help him salvage that deal, that otherwise might’ve been really unprofitable and hurtful.
- Always verify that the information the homeowner is giving you, is true.
It will (hopefully) make you equally excited to see how you’re helping the homeowner.
Closing a profitable deal is great, but, assuming you have a heart to help people in the process, that won’t be the only thing that excites you.
Don’t just focus on closing the deal, hitting your numbers, and walking away with a solid profit. Focus just as much on caring for the homeowner, treating them like a person (not a number), and find excitement and joy in that you get to help a real human being out, who is potentially in one of the hardest situations of their life.
So, what will your first deal be like?
Hopefully you’ve seen, even in this brief overview, that it really just depends on you. It depends on how much education you’ve put yourself through. It depends on how much you’ve worked to become an expert and get your numbers right. It also depends on verifying details the homeowner gives you, and being thorough in your walk-through. But it also depends on things like having a solid, supportive team around you to help you get through the slog of a bad deal, and finding joy in helping someone go through a really tough situation. If you’re committed to that last one, then I hope your next deal is really profitable.