9 Types of People Who Will Fail as a Flipper

TLDR
Nine personality types fail as flippers. Pinners chase Pinterest finishes. Jesters don’t keep cash reserves. Freezes chase the perfect BRRRR. Hosts over-renovate because they’d live there. Threaders quote forum tactics they don’t understand. Freaks trust spreadsheets too much. Purists refuse off-market deals. Collectors chase aesthetics. Loyalists assume corporate rules apply to contractors. Some of them were me.

Table of Contents

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.

Baseline: at least fifty grand for a first real estate investment with a project. As you scale and do ten projects at a time, you don’t need a proportional reserve because the probability of needing the full safety net on all ten is pretty low. That’s why banks like to lend on packages of houses.

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.

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 and The Freak

The Threader (Keyboard Warrior Disease)

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 in the Sheets (Spreadsheet Freak)

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 and The Collector

The Purist (MLS Only)

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. Be sneaky. Threaten to walk away at closing to renegotiate. I’ve had this done to me. We don’t do it.

None of these are consistent paths to scale. To really make flipping work, you need off-market flow. Wholesalers (probably newer ones with smaller buyer lists), direct-to-seller, or both.

The Collector

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.

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.

FAQ

Can I recognize these traits in myself early?

Yes. Audit yourself after every deal. Did you over-spend on finishes? Pinner. Did you run out of cash mid-project? Jester. Did you delay a year waiting for a perfect BRRRR? Freeze. Self-awareness is the whole prevention.

Which type is most common in new investors?

The Pinner and the Freeze. Pinterest-driven over-renovating and BRRRR paralysis account for a huge share of failed first deals.

Which type is most common in experienced investors who plateau?

The Collector and the Purist. Successful investors fall in love with their portfolio’s aesthetic or stick to MLS even when it stops delivering deals.

Is there a type that’s okay to be?

Some Pinner energy in a high-end A-class flip market is fine. Some Freak spreadsheet skill for new builds is fine. The problem is always when the type overrides the math.

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

You probably won’t. You’ll be one or two of them on deal one. The point is to notice which ones you are and correct fast. Track every dollar. Keep cash reserves. Write a simple scope of work. Start with MLS or wholesalers but build direct-to-seller as you go. Don’t wait for perfect.