The other day, Ashley and I were shopping for appliances for a flip. Normally it’s not a big deal. We use the same stove, dishwasher and vent hood on almost every house. But this time, it was after Black Friday, and everything was on sale.
We pointed out some different appliances we liked to the salesperson. But on each one, they tried to up-sell us. And each up-sell added a couple hundred dollars to our appliance package. The first time they did this, I explained that the price point of this particular flip wouldn’t support the higher-priced appliances.
We kept shopping until we got to the vent hoods. Of course, all of those were on sale, too. The salesperson then proceeded to tell me why we needed to pay more than double what we normally do for a particular vent hood.
I shook my head and said I just didn’t like that one. The sales person replied, “Well, are you going to be the one buying the house?” I said no and then asked why the expensive model was better than the one we normally buy. The salesperson proceeded to tell us they thought it would really make the kitchen look better.
Then I understood that they were giving us their personal opinion masked as advice. (They also weren’t going to be the ones buying this house.) We thanked them for their help and exited the store.
Proverbs 15:22 says, “Without counsel, plans go wrong, But by great counselors they are established.”
Let me put emphasis on the word great. When seeking out advice, make sure your advisor is qualified on the topic at hand. For instance, the salesperson above was qualified to tell us about the intricacies of the appliances they sold everyday. However, they weren’t qualified to advise us on which ones would help a flip sale.
As I drove away, I passed a house where I was reminded of a time I didn’t take the advice of a great counselor. The house was on Mauldin Road, and my counselor was the great Dyches Boddiford.
When we first put the house under contract to buy, our intentions were to keep the house as a rental. I called Dyches to look at it with me to see if he would be our lender on the house. Once we got there, I showed him why this house was a great deal. Our purchase price was really cheap – $32,000 to be exact. The house could be rent ready with just a minor rehab and would easily rent for $700 a month. I thought this was a no-brainer.
Dyches then proceeded to show me all the reasons why this wasn’t a good house to keep long term. He pointed out that Mauldin is a busy road which makes it hard to get in and out of the driveway. That’s a big deterrent for a family to live there long term. And a tenant that stays and pays is the most important part of a rental property, he said.
He went on to give me more reasons why this wasn’t a good keeper house, and he advised me not to buy it. What I heard Dyches say was, “Don’t buy this as a rental.” So we bought it to flip.
That wasn’t what Dyches said. He said, “Don’t buy the house.”
We had a real hard time selling Mauldin with some of the issues Dyches pointed out – namely the busy street and hard to-get-out-of driveway.
The point here is make sure the person you’re taking advice from qualifies as a great counselor. And when Dyches Boddiford tells you not to do something, don’t do it!
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.