Let’s get something straight about house flipping. You will make mistakes in this business. You’ll face obstacles you didn’t plan for.
You might hesitate and miss out on a great deal, or you might rush in too quickly and get caught in a messy situation. You might have a seller go behind your back and sell to someone else after you’ve spent months educating and building rapport. You might learn something about the market that forces you to shift your approach or your focus, or you could discover you were simply wrong about certain things and you’ll have to adapt your methods and your expectations.
You might try for a while without getting the results you expect. You might feel like you’re going absolutely nowhere.
But every time you fail, every time things don’t work out the way you planned, you have the opportunity to learn. And everything you learn takes you one step closer to success.
You might be thinking, “Sure, that sounds nice, but I don’t feel like I’m learning anything right now. I just feel like my business is failing—I can’t seem to find deals, or get financing, or convince sellers to work with me, or connect with buyers… and I’m not sure what I’m doing wrong.”
I know the feeling. So let’s talk about the difference between “active failure” versus failure in general.
For example, let’s say your estimated ARV is a little too high on a house you’re flipping, and you end up making less profit than expected when you finally go to sell it. You look at the situation and say, “I made a mistake in the deal analysis process, and because of that mistake, I didn’t get the margin I needed. I failed to meet my goal.” This is what I would call an active failure. You took a specific action, you made a specific mistake, and you can look back on what you did to see why and how it happened—maybe you didn’t look at the right comps, or you failed to take into consideration some upgrades the other homes had that yours didn’t, or there just weren’t enough comps… you get the idea.
Active failures are the ones that teach us, because they’re the ones we notice. You’re aware of the error, and while it’s true you’re probably kicking yourself for messing up, the truth is that you now know more about what to watch for when calculating the ARV on your next deal. You’ve learned and improved, and, moving forward, you can apply what you’ve learned so that you don’t make this mistake again.
Active failure is one of the best ways to learn this business. In fact, it’s essential.
But as you’ve probably found, failure doesn’t always show up like this. Sometimes you’re doing your best but your business just isn’t going anywhere and you’re not sure why. You don’t seem to be making any specific mistakes. You just feel stuck. It’s unbelievably frustrating.
In these situations, the “failure” isn’t tied to one single event or error. Rather, it’s just a general sense that things aren’t working and maybe never will. You might start to feel like you’re not good enough to do this business, or that this field just doesn’t click with you, or—worse—that it’s impossible to achieve success flipping houses.
Don’t buy into this. True failure, in my opinion, only happens when you give up. So don’t quit. Instead, push that shadowy feeling of “I’m failing, my business is failing, and I’m a failure” out of your mind and focus on the active failures.
Here’s how to do this.
- Make sure failure always comes as a result of action, not inaction. There’s a difference. When you fail, it should happen because you took a specific, focused action—just like with the ARV example above, you can look at the mistake and see what worked and what didn’t. But if you’re failing because you’re just not doing enough of the right things, what you’re facing is maybe not a knowledge problem but an action problem. So take action. Get out of your comfort zone. Try something different. Do that thing you’ve been dreading or putting off, like calling back hangups or placing a few hundred bandit signs or whatever it may be.
- Get feedback from mentors and peers. This is by far the best way to uncover the errors you might be making that could be holding you back. These people will notice things you’re doing wrong and point out mistakes. They’ll bring different perspectives and insights to the table and recommend new strategies or tactics to try. When you feel like you’re failing and you’re not sure why, there is absolutely nothing more valuable than a solid community of mentors and peers who can shorten the learning curve for you and show you where you need to make changes.
Remember, if you haven’t quit, then you haven’t truly failed. There is always an opportunity to turn things around. Fail actively, learn from your mistakes, adjust your approach, and keep going!