9 Types of People Who Will Fail as a Flipper

TLDR
The speaker opens by admitting that a rising market made his early results look better than his execution deserved and concealed weak practices for years. The nine archetypes that follow are lessons drawn from that caveat, not proof that early profits equal skill.

Table of Contents

The Market Hid My Early Mistakes

Ross starts with a warning about his own early results. The market was rising so fast that slow projects still made money. Some took years. The market carried them up and made weak work look like skill.

He later faced a hard market and had to build better systems. He has also seen many new and seasoned investors through deals and construction work. The nine types are patterns from that experience. Ross says he has been some of them himself.

The Pinner: Pinterest Boards Kill Profit

When I started, I had Pinterest boards full of pretty finishes. In one house, I put a two-story indoor waterfall. Something to show family and friends. I was proud of the craftsman style. In that same house, we custom built all the doors out of oak, oak trim throughout. The person who bought it asked if we could paint it all white before closing. Slap in the face to a guy who wanted to be a craftsman.

The Pinner watches too much HGTV. They think flipping is making really pretty houses where you’re the designer. That’s fine in high-end flips. Mostly it leads to over renovating.

Every neighborhood has a ceiling. If you renovate past the ceiling, you either lose money or you price yourself out. You can’t sell above what the neighborhood supports.

The Bracket Chart

In any neighborhood, sales fall in groupings:

  • Unlivable houses: maybe $100 a square foot
  • Just past the line of livable: maybe $150 a square foot
  • The upper end: maybe $180 a square foot

The highest end is a cap. No matter how nice your B-class finishes, there’s a gate at the top of the bracket. You can reach the tip top, but everything past the bottom of the bracket is diminishing returns.

My goal: get to the bottom of the bracket. Livable, clean, safe, paid. Leave the Pinterest board.

Key Concept
If you can’t draw a direct line from a dollar spent to a dollar (or more) back in your pocket, don’t spend it. Or at least be honest with yourself that this is a Pinterest board decision, not a wallet decision.

The Jester: Cash Reserves or Bust

Cash is king. If you’re doing real estate investments without a cash reserve, you’re in a bad spot.

I’m not saying you need cash to buy the property outright. I’m saying you need reserves in case borrowed money runs out. When your back is against the wall over money or time (and time is money because every month there are expenses), you make bad decisions for the project.

How much reserves? Everybody’s wired differently. Some people need more. Some know how to find cash fast when their back’s against the wall. One of my business partners runs on very little cash but nobody I know is better at finding cash when he needs it. The point isn’t a specific number. It’s that you aren’t making decisions out of fear.

Ross’s stated starting point was at least $50,000 for a real estate project. He also said the right reserve varies by person and by access to cash. Treat that number as his comfort point, not a rule that proves your deal is safe.

The Freeze: Paralyzed by Perfect BRRRRs

BRRRR is the holy grail. Buy, renovate, rent, refinance. You don’t even use your own cash. You just keep paying off the loans and acquiring more. Infinite.

It is true. That is the way to do it. The problem is a lot of people search for the perfect BRRRR deal forever because the deal has to be really good to make it actually work. Especially when you’re first starting out.

As you progress, you find ways to cut costs and vertically integrate. When you first start out, every cost is there:

  • Acquisition
  • closing costs on the front end
  • Renovation costs
  • holding costs
  • Closing costs on the back end (refi)
  • Wholesale fee (if wholesaler deal)
  • Real estate commission (if MLS deal)

You’re starting at the widest market (MLS), paying the most. Slowly you move to off-market, then to smaller wholesalers, then direct-to-seller, then to sellers who didn’t even know they were sellers. Each step tightens the market and better-prices the deal.

But here’s the mistake the Freeze makes. They read the forums and hear “zero dollars in a deal” and they never start. Truth is, you’re an investor. Investors invest. Leaving some cash in a deal is okay, especially early. Over time, your early deals appreciate, you pull cash back out, and everything gets easier.

Common Mistake
Letting zero-dollar BRRRR math become analysis paralysis. Expect to leave some money in the deal to get started. I still leave money in deals. Don’t let the forum math stop you.

The Host: “Nice Enough I’d Live There”

The Host says “I just want to make it nice enough I’d live there.” Ludicrous.

You probably live in an A-class house. If you’re investing in A-class neighborhoods, fine. But most of us invest in B and C class. Make it as nice as the other nice B-class properties, no more.

This is where smart scopes matter. Doing what you need to do, not what you want to do. The art is knowing where to stop.

The Trim Trap

You decide to put in new trim. It makes the wall look bad, so you paint the wall. The new paint makes the cabinets look bad, so you paint the cabinets. The cabinet hardware now looks bad, so you redo the hardware. That makes the faucet look bad. And so on.

If I’d known that cascade before I put in the trim, I’d never have put in the trim. Knowing what to leave alone is a skill.

Smart Scope vs Cutting Corners

Don’t confuse smart scopes with cutting corners. Cutting corners is overlooking safety: egress, fire alarms, broken glass, windows that don’t open, spliced wires in walls that could cause fires. Those are real problems.

Ross calls that slumlord behavior. A smart scope leaves a visible item alone; it does not hide a safety risk.

Smart scope is looking at a Formica counter and saying, “You know what, I’m leaving that. You can see it. I can see it. I’m not hiding anything. I’m doing less on this property so I can sell or rent it for less and still make money.” The buyer or renter is choosing to live there knowing exactly what they’re getting.

Over-renovating is a gift you’re giving to the buyer. If you want to give gifts, fine. Don’t call it investing.

The Threader: Forum-Trained Tactics

The Threader has learned real estate from forums. Keyboard warriors teaching other keyboard warriors. Here’s the problem.

When an experienced investor shares a tactic, it’s part of a bigger strategy. A strategy that works for their skills, their comfort level, their goals. A tactic without the bigger strategy is just a snippet. The snippet sounds good. Keyboard warrior A writes it up like they invented it. Their keyboard warrior girlfriend reads it and thinks they’re cool. Another keyboard warrior reads it, rewrites it to sound cool to their friends. It keeps getting watered down. By the time the Threader reads it, it’s far from a real strategy.

Take everything with a grain of salt. Including things I say. Gain knowledge from different sources. Apply it. Gain experience. knowledge times experience equals skills.

The Freak: The Perfect Spreadsheet

The Freak has built the perfect model in Google Sheets or Excel. Every cost. Every variable. They know their deal will work because the spreadsheet says so.

That works for new builds. Not for the rehab deals I think you should actually be buying. You just don’t know what you’ll find behind the walls. You can gain clues. You can estimate financial contingency by property type. You cannot hit it exactly with a spreadsheet.

Have a system that allows for chaos. That’s different from trusting the spreadsheet.

The Purist: MLS Only

Cash is king, but the deal is the true king. The deal is where most of the money is made.

The Purist only buys on the MLS. They think off market is dirty. Some of it is. Some realtor stuff is dirty too, if you’re dealing with the wrong people. Get the mindset out of your head.

Buying only on the MLS, you have limited paths to a deal:

  1. Be first. Watch constantly, offer fast.
  2. Overpay. Some strategies work long-term even if you pay today’s market.
  3. Take a house that needs massive renovation. Work-heavy deals scare off most buyers.
  4. Have cash and close fast.
  5. Do not use a late price ambush. Ross says a buyer tried it on him near closing, and he says his team does not do it.

None of these are consistent paths to scale. Construction skill is still a key defense: it helps you take on rougher deals and keeps costs from running away. But Ross says the larger profit lever is buying a better deal at the start.

That takes deal flow beyond the MLS. Ross’s sequence is simple:

  1. Build a home base, such as a site and local phone number.
  2. Run outbound lead capture, such as direct mail.
  3. Put leads in a CRM and keep following up.
  4. Learn to negotiate.
  5. Build ties with wholesalers too, especially newer ones with smaller buyer lists.

Use only outreach methods that are lawful and appropriate for your market. The source presents the home base, outbound, follow-up, and negotiation as one connected system.

The Collector: A Portfolio for Show

The Collector has a portfolio they want to show off. Similar to the Pinner, different motivation. They care about the types of properties they own and the areas they’re in, not the actual money the properties make.

The only portfolio worth showing off is your P&L. And you shouldn’t show that off either. Keep it quiet.

Ross catches his own contradiction here: he is making content that assumes he has made money in real estate. He explains that he has a vision for useful software and digital products, and without an audience he would have nobody to show them to.

The Loyalist

This one is hard to say right. The Loyalist assumes corporate rules apply in the blue-collar world.

I started in the corporate world. Good salary. I could buy rentals using bank loans. I learned leadership. I thought I could take those skills and make my own thing work just as well.

Couldn’t.

When you go from being the employee in the middle (the pad between people and the corporation) to being the corporation yourself, things change. You’re no longer the pad. That takes adjustment.

Blue collar is different from white collar. Different currency. In the office, reputation in office politics is a form of currency. Outside, reputation as a business owner matters but in a different way. Every contractor is running their own business, with their own crew, on razor-thin margins, often with their back against the wall. Strategies that worked in the office don’t translate.

I didn’t understand that. It cost me financially multiple times. Don’t be blind to it.

Pro Tip
If you come from white collar, expect a learning curve in the blue collar world. Systems, leadership, and contracts all work differently. Respect the difference. You don’t have to like it. You just have to understand it.

The Closing Check

Look in the mirror and ask which patterns fit. Then work on them before they steer the next deal. Ross is not trying to be dogmatic. These are the money effects he has seen in his strategy, not laws for every investor.

Take everything with a grain of salt, including what Ross says. Learn from more than one source. Use the knowledge. Gain experience. That is how knowledge becomes skill.

FAQ

Can I recognize these traits in myself early?

Ross closes by asking readers to look in the mirror. If one pattern fits, work on it. His goal is to show the money effect of each tactic, not claim every strategy works the same way.

Which type is most common in new investors?

The source does not rank the nine types. It does spend a lot of time on over-renovating, weak reserves, and waiting for a perfect BRRRR because those can stop an early deal.

How do experienced investors plateau?

The source does not rank a most common plateau. The Collector values a portfolio’s look over its profit. The Purist limits deal flow to the MLS. Either pattern can pull focus away from the numbers.

Is there a type that’s okay to be?

Ross says design work can fit a high-end flip and a detailed sheet can fit a new build. The warning is against using either one outside the larger plan.

I’m brand new. How do I avoid all nine types?

Take every tactic with a grain of salt, including Ross’s. Learn from more than one source. Apply what you learn and gain experience. That is how knowledge turns into skill.