What I Did Right (& Wrong) On My First House Flip—Part II

I’ll start with one of my fails on this project.

I overimproved this house. Back in 2011 travertine everything was the rage. I bought nice (too nice for an entry level house) high quality travertine, rather than the less expensive tile at Home Depot. I had the shower pan hot mopped and hand tiled, when we could have just installed a two piece shower enclosure.

I didn’t know it at the time, but the market wasn’t going to pay me for these over-improvements. My buyers, of entry level detached housing in San Diego County, wanted granite counters and stainless steel appliances. These were the bling items that they could brag to their friends about. Heck it didn’t even have to be expensive granite.

While markets and therefore consumer behaviors change, the fundamental skill of understanding the intersection of what your consumers will pay you for and what your input costs look like is timeless.

There were wins on this deal however. Previously, I mentioned that I never fronted around the construction crew as if I knew anything about construction. I didn’t and they knew it within a hot second. Instead, I walked the property for several days with a journeyman framer that had built houses for twenty plus years, and he schooled me on the basics.

I’ll end this post with a final mistake, but one I don’t regret. We bought this house for $255,000, put $55,000 into it and sold it for ~$403,000. I hadn’t traded in that market before. You have to do a handful of deals in a shortish time frame to get a “feel” for the market. We underpriced the house and left some money on the table.