Every new business faces growing pains. When I first began flipping houses for a living, I dealt with and overcame many unexpected challenges.
Today,Â I am actively flipping 2-3 houses per month, however I still face growing pains. This past week in particular has presented 4 distinct challenges that I am working to overcome.
In this post I will share with you the challenges I am facing in my business right now, because IÂ know you will face similar challenges as you build your house flipping business.
Challenge #1 - Managing The Details
We have expanded our business rapidly and I lost some control with regards to the details. I had many projects going on all at once and I noticed that mistakes were happening.
This was nothing my team and I couldn't fix or handle, but I felt like I wasÂ in a reactive state-instead of being proactive. To help resolve this challenge we implemented checks and balances by creating in-depth check lists which I use to help keep people accountable for getting things get done.
One check list we created is a Post-Rehab Check List that takes my team through every room, with a check list to approve or disapprove the work completed. Our contractor gets a copy of the checklist and signs off on it. Then Bill and Steve (two of my team members) will follow up with the contractor.
Once everyone has signed off on the checklistÂ I do a final walk through of the property.
Challenge #2 -Â Cash Flow
When growing a business you must pay attention to your cash flow, and in the house flipping business, our income only comes when we sell houses. If you are not selling as quickly as you might anticipate, you must have enough cash on hand to pay all operating expenses like payroll, rent, electricity and yourself if you need a weekly check.
With many projects going on and houses for sale all at once, I personally don't take in any profits until my houses sell. Be prepared to anticipateÂ run into this challenge as you grow your house flipping business.
Challenge #3 - ManagingÂ Email
Managing email may sound like no big deal, but I am finding it to be quiteÂ challenging. Email can take me away from tasks at hand when I find myself constantly checking my inbox.
To help myself manage email, I do one of three things when an email message hits my inbox:
- Reply immediately if genuinely urgent
- Batch it for later if the message is not urgent
- Take action if email requires something other than a normal email reply
I also use email filtersÂ that send social email to a social folder, promotional email to a promotions folder etc.
Challenge #4 - Unexpected Happenings
In the house flipping business unexpected things happen all the time and can throw you off if you're not prepared to adjust and handle the unexpected thing in the right way.
For example, three days before a closing Â a lender of mine tried to change the terms of our loan. This change would cost me another $10,000 in interest on the loan. I wasn't prepared for this and it became very stressful trying to get them to understand that was not what we discussed for terms.
One week goes by and we still don't have it resolved. I am now forced with the possibility of finding another lender with only a week left to close. Of course I have a back up plan in place but this unexpected happening is creating a lot of unnecessary stress for me. If I can't work this out I will faceÂ forfeiting my deposit and money spent to go through the permitting process.
What I ultimately had to do was secure financing through another private lender, in combination with bank financing.
Stressful? You bet!
However it all worked out and I am closing next Wednesday- 1 day before the deadline!
What challenges are you facing right now in your business? Let me know by commenting below.
See you at the top!