In 2004, when the housing market was red hot and everyone and his brother were buying houses with ARMs and no down payment, I flipped houses as a sideline business. A friend convinced me it was an easy way to make money. It wasn’t long before I discovered it was time-consuming and stressful.
I was spending every weekend visiting open houses. At night I was reading books on how to make money rehabbing houses. I was spending time with contractors when I could even get hold of them, trying to figure out why everything was taking so long. Our contractor failed every inspection. I found out later he had paid someone to take the licensing exam for him.
Our realtor, like me, was practicing law full-time and working on real estate on the side. The first house sat on the market. One day I went through it and thought, this is such a beautiful house. Why doesn’t anyone want this? The staging was lovely, I had planted the back garden and the side strip, there were flowers in bloom, but the house did not sell. It was a jewel box, but small, before tiny houses got trendy.
Finally the house sold, and I got a new agent and contractor to work on the next house. There were similar problems and that house sat on the market a long time. I had come to hate the flipping business. I had looked forward to it as fun and fulfilling, and instead it seemed like Rosemary’s baby, a scary disappointment. I got my money out. The only houses I have remodeled since were my own.
We made some money, so I can’t say the business failed. What failed was the “NOW” test. No, this has nothing to do with right now, more it is whether you should start something now. The way you phrase the problem, decision, goal or project creates the solution or invites failure. Besides creating a sense of urgency, the “START NOW” acronym reminds you to ask and answer the questions of “what,” “when,” “why,” “how.” You need a doable objective, with specific actions and dates. If you invest some time into phrasing it well, you are well on your way to achieving success.
When I decided to go into real estate, if I had answered the eight “START NOW”questions I discuss in my new book, The Personal Power Roadmap: The Ultimate 7 Step System to Effectively Solve Problems, Make Decisions, and Reach Your Goals, I would still have gone into that business. It was only later that I realized that just because I like houses, didn’t mean I liked flipping them. I learned in the School of Hard Knocks that it’s not a business to go into part time. Only later did I realize that to make money in the business, one had to do a lot of the work oneself and had to do it nearly round-the-clock.
The “START NOW” questions must be reexamined as you go along. The answers can change based on experience and shifts in the marketplace. At some point, I realized that I no longer could answer the last three questions — the NOW test — with any enthusiasm. I no longer wanted to put the time and effort into the project that success requires. Besides from the money, which wasn’t much more than passive investments were making, I wasn’t getting the satisfaction one gets from achieving success. The stress outweighed the benefits.
That day I wandered through the house and thought, why doesn’t anyone want this lovely place, I was seeing a successful outcome to the renovations, but without a successful outcome from a quick sale. Without the money from this house, we couldn’t invest in another one unless we took a loan. The loan would have wiped out or overly narrowed the profit margin. So we were stuck with a lovely place and nothing to do while it sat on the market.
I now regularly revisit the START NOW questions to see if my reasons for doing something are still sound. Am I still willing to make the effort required for the project to succeed? If not, I should work on the exit strategy built into the process when I began. If I fail the NOW test, I need to revisit my Plan B or “bridge back.”
If you want to know more about this process and how to apply START NOW, The Personal Power Roadmap: The Ultimate 7 Step System to Effectively Solve Problems, Make Decisions, and Reach Your Goals, is available at a low introductory price both as ebook and print book.
To get a free copy of the eight START NOW questions in a 2-page PDF, with examples of how to apply them to your problem\decision\goal\project, click here.
I had looked forward to flipping as fun and fulfilling, and instead it seemed like Rosemary’s baby, a scary disappointment. I failed the NOW test but got a "B" when I got my money out.