I wasn’t sure about this one, it looked like it definitely had potential but there were a lot of big problems that needed to be taken care of that could potentially eat into our projected profit margin. Roof repair wasn’t the only thing that needed to be done either, there was pretty bad water damage in a lot of the house as well. I wasn’t as comfortable with risk as my partner was but you could tell that by the way he played blackjack, his name was Joe and he was a wheeler and dealer. I ran the business side of things and made sure that we weren’t losing our asses over something that I should have seen. Flipping houses wasn’t as easy as people thought it was, there were a whole lot of factors that need to be taken into consideration before you even go look at any particular house. Ideally, you’d like to get an idea of what the homes were selling for in a neighborhood once they were fixed up. If you can identify a neighborhood that is considered up and coming, and you can buy an old house, fix it up and sell it for more than you put into it then you’re getting the hang of it. Obviously, you’d like to buy the house for as low as possible and sell it for as much as possible but taking things like damaged roofs, plumbing, electrical, structural and interior cosmetic issues into consideration is a very important part of the process.
Take this house for example that I am looking at today. It’s in a good neighborhood with an elementary school nearby, the light rail is within a quarter mile and the house is in pretty good shape for the most part. However, I knew that we were going to need to get an estimate from the roofers on what it was going to cost us to replace the entire thing. The internal plumbing of the house was fine, the water damage was coming from above and it was happening everywhere. I’m not sure what happened but it looked like the house had been in a state of disrepair for a long time, the realtor didn’t have too much information on it. I didn’t know much about the roofing business but I knew that we’ve underestimated repairs of this magnitude before and it’s hurt us. I just wanted to make sure I was doing everything I could to make sure we made the right decisions on these homes. I insisted that we get a day to decide so we could get the roofer out to assess the damages and give us a quote. We knew the extent and the cost associated with all the interior of the house but we really needed to fully and accurately understand what the outside was going to cost us, mainly the roof. The realtor said he’d pass along the word to the home owner that we wanted another day to decide.