By Mike Baird
My wife and I just recently had our sixth baby. You would think that since we’ve been through this process five times already, we’d be old pros by now. The thing is, though, every pregnancy is different, and so is every baby. As we made our way over the nine months up until labor and as we’ve continued through the first weeks of our child’s life, I’ve been thinking about how much raising a baby can be like flipping a house. I know, that sounds pretty weird, but let’s take a closer look at what I learned – and what you can learn – about real estate investing from my newborn.
There is Such a Thing as Over-Preparation
First-time flippers and first-time parents have a lot in common. They spend their entire pregnancy reading books on raising children, preparing their home for the baby, figuring out sustainable ways to deal with diapers and baby wipes, and every other thing you can possibly imagine.
Then Mom goes into labor, and what do they both say? “Not yet! We’re not ready!” Before they know it, though, they’ve managed to get to the hospital, and Mom is in labor. After a few hours of sweating, breathing, and maybe some cursing, they find themselves the proud parents of their first-born baby.
A pregnancy finishes whether you’re ready for it or not, which is a good thing because most of us never feel fully ready to be parents – even when we’ve just had baby #6. Your preparation and research time before flipping your first house, though, could go on forever. The fact is, you’re not going to feel like you’re really ready, but when you find a great deal, you need to go for it because it’s time for that baby (flip)!
Every Baby is Different – So is Every Deal
Whether it’s your first baby or your sixth, and whether it’s your first time flipping a house or your sixtieth, every one is different. Some babies talk earlier but wait to walk. Some sleep through the night much earlier than others. Some are fussier, and some are quieter. All of them grow into adorable toddlers and amazing children. My wife and I can debate all day long about which one of our children was the easiest baby to deal with, but the fact is they were all a joy, and they were all challenging.
House flips are exactly the same. You’ll get one at auction for a steal, but you’ll walk into the biggest rehab nightmare of your life. You’ll have one that seems to nickel and dime you to death with tiny add-ons to the budget. You’ll have one that’s going great until you find out you have a crack in the foundation halfway through your rehab.
Much like being a parent, being a house flipper is all about being adaptable to challenging situations. When you take five kids out to eat, you need to make sure you have an exit strategy in case somebody gets sick or wets themselves. If you want to be successful in real estate investing, you have to have an exit strategy for a flat market or a rehab that goes way over budget.
Flipping a house is a lot like having and raising a baby many ways. It’s definitely challenging, and every one is different, but it’s also incredibly rewarding. Just like watching your newborn learn to walk, you can watch your rehabs turn into beautiful houses that your buyers are going to be delighted about. And that is what my (latest) newborn taught me about real estate investing.