858: Real Estate Gone Wrong: The House Flip That Fell Over (-$380K) w/James Dainard

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 15 December 2023

⏱️ 23 minutes

🔗️ Recording | iTunes | RSS

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Summary

One real estate investing mistake cost house flipper James Dainard $380,000. This mistake was so bad that, in the long run, it may have cost him up to three-quarters of a million dollars. So what was the grave mistake a multi-decade veteran house flipper made that would bankrupt the average real estate investor? Stick around to find out unless you want your house to literally start falling off a cliff (like James’ did). James has been doing real estate deals in Seattle for two decades. He’s flipped hundreds of houses, but even the experts get it wrong sometimes. Piggybacking from our last episode, James will walk through one of the worst house flips he’s EVER done, the mistakes he could have easily avoided, and why you never, EVER close on a flip until you have permits in place. Want to hear last week’s episode about the live in flip that cost a new mom over $300,000? Click here to listen to the episode! In This Episode We Cover: The biggest mistake house flippers can make when investing in 2024 and beyond What to do when your house flip suddenly stops making financial sense Foundation issues and how to correct a house that’s literally starting to slide Forecasting permit times and how not doing so can cost you over $100,000 Why you always, ALWAYS need to have emergency reserves on hand when doing a home renovation or house flip And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Be a Guest on the BiggerPockets Podcast Ask David Your Question David's BiggerPockets Profile David's Instagram Rob's BiggerPockets Profile Rob's Instagram Rob's TikTok Rob's Twitter Rob's YouTube Weather Underground How to Make a 120% Return by Buying “Negative” Cash Flow Real Estate Connect with James: James' BiggerPockets Profile James' Instagram Hear James on the “On the Market” Podcast Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-858 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to the Bigger Podcast Real Estate Podcast. Today is the second of two episodes about
0:04.7	deals gone wrong. Shows were you hear from Real Estate Pro's about mistakes they made
0:08.6	so that you don't have to, especially important in a challenging market like this one
0:12.3	where it's very hard to make those numbers work.
0:14.6	Today we're going to be diving right into a deal with our good friend James Daynard, an expert investor and host of the bigger pockets on the market podcast,
0:22.0	James calls this deal Humpty Dumpty
0:24.5	because the property itself had a great fall and it's also a deal where he happened to
0:28.9	lose $380,000.00.
0:33.0	And I'll say it again.
0:33.7	Being a strong real estate investor isn't about never losing money because that's going to happen.
0:38.3	It's about being prepared so that when you do lose money, you bounce back, have strong fundamentals, fundamentals know how to react and have a plan
0:44.4	to get yourself back in the game let's get into it
0:47.3	so uh James when did this deal happen and how experience were you at the time? I would say I was very
0:55.5	experienced this deal happened in the last 24 months I've been investing since
0:59.1	2005 one thing I can't tell you is if you invest for a long period of time, you're going to run into these deals more regularly than you want.
1:07.0	But lots of practice before I got to this major loss.
1:10.0	Mine was a $380,000 on my bank account loss. So it was not on paper. It was a real, real hit.
1:18.0	And it was just a deal that we bought in 2019 and we finish it up and the worst time you could
1:23.7	ever finish a deal in the last 10 years in 2022 and and it took a clip.
1:30.3	All right James what kind of property was this? So it was just a single family, our bread and butter single family fix and flip.
1:36.0	It was a 2,000 square foot house, major fixer, view property, great area of Seattle,
1:42.0	but it's what we do on the regular buy house, renovate it
	...

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