Real Estate Rehab Secrets: Ask Me Anything Part 2

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This episode of Demo to Dollars delivers real-world, actionable strategies that separate successful investors from the crowd.

Most aspiring house flippers never take action because they lack a clear blueprint. They scroll endlessly through online listings, hoping to stumble upon the perfect deal. But as we reveal in this Ask Me Anything session, the real opportunities lie where others aren't looking. You'll discover how to build multiple lead pipelines through direct mail campaigns, strategic networking with probate attorneys, and even unexpected sources like mail carriers who notice vacant properties.

Beyond finding deals, we tackle the questions that plague both new and experienced flippers: Should you stage your properties? How do you pay contractors without getting burned? What's the smart way to handle unexpected renovation costs? And should you attempt luxury flips for bigger profits? Each answer comes packed with practical wisdom gained from years in the trenches - like using milestone payments to keep contractors accountable, budgeting 10-20% for contingencies, and why staging creates an emotional connection that can lead to faster sales at better prices.

The house flipping landscape is competitive, but with these strategies, you'll position yourself to win consistently where others fail. Whether you're contemplating your first flip or looking to scale your existing business, these insights will help you build a sustainable, profitable real estate operation. Follow us wherever you get your podcasts so you never miss an episode of Demo to Dollars, your no BS playbook for flipping houses. Now get out there and get cracking!

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Episode Transcript

Ed Mathews (00:00):
You need multiple lead pipelines working at all
times so you're not dependent onone single source.
Ever sat in your car scrollingthrough Zillow and thought, man,
if I just knew where to start,I could flip one of these.
Yeah, I've been there too.
Most people who want to fliphouses never even start, not
because they're lazy, butbecause they don't have the

(00:20):
blueprint.
Well, that changes today.
If you give me five minutes,I'll give you real world
flipping strategies thatactually work.
No fluff, no theories, nogatekeeping, just real how-to
information for you to applytoday.
This is Demo to Dollars, yourno BS playbook for flipping
houses.
And I'm Ed Mathews, your host,okay.

(00:42):
So we got really good feedbackon last Friday's Ask Me Anything
session, so I thought IMatthews your host.
Okay.
So we got really good feedbackon last Friday's Ask Me Anything
session, so I thought I'd do itagain this week.
So with that, larry C inKlamath Falls, oregon, asks how
do you find good deals wheneveryone else is chasing the
same ones?
Love this question.
This is where real flippersseparate from the hobbyists.
You can't just scroll throughrealtorcom and hope to win.

(01:04):
You've got to get creative.
I focus heavily on off-marketdeals because there's far less
competition and a little moreroom to negotiate.
That means direct mail totargeted sellers, cold calling,
door knocking and evenwholesalers who send me their
good stuff before it hits themarket.
I also work with probateattorneys, family attorneys and

(01:25):
even mail carriers who noticevacant properties.
You need multiple leadpipelines working at all times
so you're not dependent on onesingle source.
Networking with other investorsis also huge.
I wholesale properties that Ican't get to all the time, and
it's not because I don't want todo the deal, it's that I don't
have enough bandwidth.
It does happen, probably onceor twice a year.

(01:46):
Sometimes they have deals theyjust can't handle and we'll pass
them along for a finder's fee.
The truth is, most people won'tput in the effort to dig for
deals, which is exactly why youcan win by doing it consistently
.
If you want to beat thecompetition, you have to play
where they aren't looking.
Marcie M in Carmel, indiana,asks do you always stage your

(02:08):
flips before selling?
Not always.
For instance, for modest homes,we typically don't have the
margin.
That said, staging can be superhelpful.
It absolutely shaves days onmarket off our exits.
An empty house feels cold andlifeless and many buyers lack
the imagination to see the housefurnished with their stuff, but
staging helps the buyersvisualize how they'll actually

(02:30):
live in the space.
So it's not just aboutfurniture.
It's about creating anemotional connection, and I've
seen staged homes sell fasterand occasionally they'll sell
for more money.
And that's because peoplearen't just buying four walls
and a roof, they're buying avision of their future.
Even light staging, like addingrugs and art and accessories,

(02:50):
can completely change the vibeof a home.
And the best part, you don'tneed to own the furniture.
You can rent it for a fractionof what you'll make back in the
sale price.
Staging is marketing, plain andsimple.
If you want top dollar, youneed to sell the dream, not just
the property.
Okay, venky R in Hartford,connecticut.

(03:12):
What's the smartest way to paycontractors so you don't get
burned?
The key is milestone payments.
You only release funds whenspecific parts of the job are
completed and verified.
Never pay 50% up front.
That's how you end up with ahalf-finished kitchen and a
ghost of a contractor.
I start with a small deposit tocover initial materials,

(03:33):
usually no more than 10% andthen we set up clear checkpoints
.
For example demo complete,rough-in done, drywall finished,
final touches is complete.
Each milestone has a setpayment tied to it, and the
final 10 is only released aftera full walkthrough and the punch
list is done.
This keeps the contractorsmotivated to finish strong.

(03:55):
Also, always, always, always,get a lien waiver with each
payment to protect yourself,just in case the contractor
doesn't pay his subs and theyend up coming after you later
and never pay cash.
Always use a method that leavesa paper trail.
You're running a business, nota handshake operation.

(04:16):
Next question Mark S in RehobothBeach, delaware, how do you
handle unexpected rehab costswithout killing your profit?
Every single project gets acontingency budget.
It's usually at least 10%,sometimes 15% or 20% of the
total rehab cost.
That money is there forsurprises like mold that we find
behind the walls, foundationcracks that we missed or old

(04:39):
wiring that needs replacing.
Every project has a curveballand you need to plan for it.
The rookie mistake is runningyour numbers so tight that one
bad discovery wipes out yourmargin.
I also recommend getting athorough inspection before you
buy, even on flips, even ifyou're buying as is.
So at the very least you knowwhere the landmines might be.

(05:00):
But even with inspectors,there's always something you
won't catch.
The key is to expect theunexpected and plan for it in
your budget when you don't usethe contingency fund.
It's like finding bonus profitat the end of the project and if
you have to use it you'll beglad you planned ahead instead
of scrambling for extra cash.
Mid-project Discipline in thebuy phase is what protects you

(05:20):
in the build phase.
Bill O in Bryn Mawr,pennsylvania, asks Should I try
flipping luxury homes for biggerprofits?
Luxury homes can be temptingBigger price tags, bigger
margins but they also come withbigger risks.
The higher the price point, thesmaller the pool of buyers,
which means longer hold timesand every month you hold, your

(05:41):
carrying costs eat into yourprofit.
Luxury buyers are also way moreparticular.
They expect top-notch finishesand they won't tolerate sloppy
work.
That means higher rehab costsand a greater need for
perfection.
If you're just starting out, Ihighly recommend hitting a whole
bunch of singles and doublesbefore you swing for the fences.

(06:02):
These bread and butter homesmove faster and are more
forgiving if you make a smallmistake.
Once you've built up experience, systems and cash reserves,
then you can consider moving onto higher end flips, but until
then, play where the odds are inyour favor.
That's it for this episode.
Thank you so much for making usa part of your day.

(06:24):
If you're getting value out ofthese shows, drop us a comment
and definitely follow us.
It helps us grow.
Until next time, thanks forlistening to Demo to Dollars.
If today's episode helped youmove one step closer to your
first or next deal, do me afavor follow us wherever you get
your podcasts so you never missa show.

(06:44):
I'm grateful to be part of yourjourney.
Now get out there and getcracking.
Bye for now.