055 | My Mistakes That Blew Up Our First Flip House Budget

Speaker A: M. This is She's Equipped with Jennifer Allwood, a podcast for Christian women in business who want to earn more from their God given talent, grow their impact, and lead with faith. Well, hey, friends, welcome back to the podcast. I'm Jennifer Allwood. This is She's Equipped. And we're doing just something a little bit different this month. Hey, it's July. It's my birthday month. And, um, you know, when you've been podcasting, I need to go back and look. Has it been almost eight years? Sometimes you just feel like, is there anything new under the sun to talk about? And so it's fun just to do a little bit of a different topic. Um, last week I did a podcast entitled the Mistakes that Blew Up Our First Flip House Budget. Um, no, actually, I'm so sorry. That's what I'm going to do right now is the mistakes that blew up our budget. Last week. What I did was the real cost of our first flip property in Kansas City. So if you're interested in, like, real numbers, like what we bought our first flip property for, um, what I anticipated the budget was going to be, what the budget actually turned out to be, how much we're listing the house for. Go listen to that. That's episode number 054. Today, what I want to talk about is why I blew the budget so bad. Okay. Um, because it's bad. It's almost. It costs us almost double to renovate this house, um, than what I anticipated. And there's a lot of reasons for that. And here's what I want to say. Anytime, um, you're doing something for the first time, there's going to be a learning curve. Okay? And so Jason and I knew that this first property of me flipping in Kansas City, and yes, I'm anticipating that we're going to do another one right behind it. But we knew that, um, this is going to be the one that I'm probably going to make some mistakes on, and, um, that I'm going to learn a lot and probably also pay some stupid tax. And those are Dave Ramsey's words. Um, and we did. We paid some stupid tax. There was a lot of things that I could have done better, should have seen, should have, whatever. But I kind of want to give you, like, an overview of why we blew the budget so bad. Because blowing the budget on your first flip property is one of those things that would make a lot of people go, okay, clearly I'm not cut out for this, or, um, I can't afford for this to happen again. Therefore, I'm not going to do it again, et cetera. And. And, um, I think that we don't give ourselves enough, like, grace. The first time we do anything, we give it to everybody around us. Like, think about your children and the first time that they went to walk. And, like, if I was to think of my son Noah, and the first time he walked and he fell down, I mean, there's no chance that I'd be like, well, that just goes to show that kid's never gonna be able to walk. He's terrible at it. Probably just better stick to crawling all of his life, you know? Like, we don't do that. Right? But we do, because he's learning something that he's. He doesn't know how. He's trying to, um, gain, um, the ability to do something that he's never done before. The first time that Easton, who's editing this for YouTube, hi, Easton, uh, learned how to ride a bike and crashed. I don't even remember if he crashed Easton. But if you did. Like, I didn't look at Easton and go, what an idiot. I can't believe that he did that. Clearly, he's not cut out to ride a bike. Like, we learn by making mistakes, but yet nobody wants the mistakes. And also, we watch hgtv, and, yeah, there's some mistakes, and a lot of times they're funny mistakes. And what I would rather share with you today is, you know, just like last week, I shared with you the real, real on the numbers. Today I want to share with you, like, the real mistakes. Um, because I think that's the only way for us to learn is to A, go through it, or B, to learn from the mistakes of somebody else. And by the way, if you've not flipped a property yet and you plan on it, you'll make your own mistakes. And hopefully they just won't be the same ones that I'm about to tell you that I just made. Hopefully you'll learn something through it. And, um, you know, one of the desires of my heart, one of my prayers is always like, lord, just like, help me to have just such a teachable spirit. I want to be someone who learns, who's willing to learn. And, um, you know, in my flesh, a lot of times I don't even like, uh, the people that God sometimes chooses to teach me different things because. Because we can learn from people half of our age. I learn stuff all the time from my kids, and it irritates the heck out of me. You know what I'm saying? Because I'M like, I should be the parent here. And instead, you know, Ari's teaching me more about patience than what I ever thought that I would have to learn parenting an 11 year old with ADHD at this age. And so, um, I want to have a teachable spirit. Yes. Lord created me a pure heart. And also keep me teachable and humble. And so, um, in order for me to teach you guys, because if you've been in my coaching group, if you were a woman in business and you've been in my coaching group, if you use, um, equip360 software, first of all, thank you. But you know that, like, it's my heart just to be able to teach women, um, and to be able to kind of pull out of them the things that they can't see, um, and also just to, um, to show them a different way, both financially and, um, oftentimes just in life. And so if I can help some of you to not create some of the same messes for yourself that I just did on this first property, then I will just assume that this is a job well done. Okay? So I made a lot of mistakes on our first flip house. Um, go back and listen to episode 54 where I talk about how far over the budget we went and what the budget was, what it ended up costing us to renovate the property, and what I think we're going to be able to sell it for. Um, by the time you listen to this, the house will be on the market, which is great. But the budget, you know, for renovating, um, you know, you, you buy a property for a certain price, and then you have the cost that you think it's going to cost you to renovate it. And then there's the cost you turn around and flip it for that you sell it for, and the profit is, you know, right there in the middle. And, um, and I shrunk our profit by 50%. Ha. Not funny at all. Um, and so, but there was a lot of reasons for that. Okay? Number one, I got taken advantage of, um, by more than one contractor, but there was one in particular. And I don't say this because I'm, like, trying to play a victim, because I fully own that I should have caught the red flags, but I ignored a lot of the red flags. And I don't want you to ignore any red flags that God puts in front of you, because I was just like kind of shoving it down and being like, no, maybe this is how the industry is. Maybe this is how contractors work. Maybe this is whatever but, um, we had a situation with our deck that I put something in a Facebook group, um. In Facebook. A Facebook group. In Facebook, duh. But I put something in a Facebook group that I was looking for a contractor to renovate or rehab the deck that we had on the back of the flip property. And I got DMs. I mean, I probably had 30 DMs within the first couple of hours. And, um, several of them are like, you know, where's it at? I can come tomorrow, I can come the next day. I can come whenever. Um, but one of the guys was like, what's the address? I gave it to him. I can be there within an hour or whatever. Okay. That should have been my first red flag. That should have been a red flag. Anybody that is available that quickly is probably not out working, right? And if they're not working, and this isn't all the time, but I just want you to be thinking about this for your own self. If they're available that quickly, they have nothing else going on. If they have nothing else going on, then are they really that booked out? And if they're not booked out, why? You know what I'm saying? And so, I mean, back when I owned my painting company, it would be weeks before I could get to somebody for, um, you know, just a consultation. And I did just recently do a podcast episode, though, on how important speed is in, like, business in 2026. Let me see if I can find that episode number for you. Hang on here. Um, 052. You can go back and listen to 052, where I talk about speed, speed, and how important speed is in business. And, um, because so many women spend so much time overthinking things, you're losing out on so many opportunities. Okay. But this guy was available and came to the property literally a couple hours. And I was super impressed. I was, you know, just by, um, him just, you know, kind of being gutsy enough to come and to come that quickly again should have been a red flag. Then he gave me a verbal quote on the spot. That should never be the case. I'm going to tell you why it should take somebody some time to go home and put some pen to paper. I think this is going to be the cost of materials. I think this is going to be, um, what it needs to get this deck up into, you know, working capacity to make sure that it's going to pass code. Um, there should have been a lot more questions from him. What is your actual goal? Well, my goal is to make sure that when we Flip this house that it goes up for sale in the next 35 days, that everything is going to pass an inspection. And, um, that we do it for as little money as possible, but that at the end of the day it passes. Um, so he should not have been giving me a number right there on the spot. It should take some time for them to go home, for them to type something up. It also there should be, um, things in writing specifics about the project. And instead of just, uh, I could probably even find it if I looked real hard. Instead of just, um, uh, rehab deck or refinish deck or whatever. If you have a contractor who's wanting half down up front immediately, um, that's often a red flag. If then later they come back to you and the number starts going up and we're going to need this much more and that much more, that is a definite red flag. Um, I had a different contractor who wanted me to, um, uh, make checks out to him personally. This was not the DEC contractor, but another one, um, instead of his business name. That should be a total red flag. There's only a couple reasons people want you to make a checkout to them personally instead of to their business name. Do they even have a business? And if they don't have a business, they're probably not a licensed contractor. And if they're not a licensed contractor, run. If they ask you for several small checks instead of one large check, which I had a contractor do, which then I was like, whoa, whoa, whoa, here what's happening? If they're trying to send you a contract for you to sign, they. But they're saying things like, hey, it's not going through. My email's not coming through for you. It's saying I've, you know, I've, I've hit my limit for being able to send things out today. Okay, what do you mean you've hit your limit? You can't send any more emails in a certain amount or the software that you're using, is it a free version of something that only lets you do you know a certain number of things before it turns off the free version, then you gotta pay for it. Like, one of the biggest reasons that I went over budget wasn't necessarily like the construction? Um, I mean, in a way I guess it could have been. But one of the biggest reasons we went over budget is because, um, every time something felt slightly off, I talked myself out of trusting my own instincts and looking back, like the Lord was trying to protect me, my gut was trying to protect me. But in my brain, I was like, time is money. Let's get it done quickly. I've told the Internet I wanted it done in 30 days. I could do it, so let's just keep, you know, pressing on the gas. And that ended up actually costing me. So if I could do it all again, I would be very wary about hiring from a Facebook group, from an individual who comments on your post or sends you a dm. It's different if Susie Q in the Facebook group says, hey, you know who I used for electricity? I used this guy. Or you know who I used for junk removal? I used this, um, you know, business over here. That's different because those are, like, almost testimonials. But if you've got a person in the group who's like, I can help you, then they're immediately sending you dms. Um, they're not wanting to put anything in writing. The contract is janky, meaning the contract isn't even a contract. There's no place for you to sign. Run, run, run. Okay. Also, um, make sure you're getting receipts from these contractors, because some of them are just jokers, honestly. And they're not giving you paid receipts because there's a whole slew of reasons. Okay. But don't ignore repeated red flags just because you're in a hurry. That was one of the biggest lessons that I got. If something feels off, it definitely usually is. All right. Number two reason why our budget, you know, was. Whenever the budget bad M double is because I just didn't know what I didn't know. And there's a learning curve that often equates to dollars when you don't know what you don't know. Essentially, it's nobody's fault. It's just like learning tuition. This was my first time flipping a property, so I learned a ton. I won't make those same mistakes again, just like you won't. You know what I'm saying? Like, you learn through experience, and everybody wants the win. Nobody wants the experience. That has come at a cost either of time or money. Everybody just wants the win, but they don't want the middle, the learning piece. And the learning piece is what sets you up for success, you know, every time after that. And I just didn't know what I didn't know. I didn't know when I walked through the property that the laundry room was built on top of a deck because I couldn't see the deck because of all the overgrowth when I tried to go out onto the deck. So I couldn't even See that the deck was, like the floor of the laundry room, and it was rotten. Uh, I didn't know. I didn't know I was going to need a new roof. In fact, I said to the guy, I had an incredible experience with a roofer, by the way, and he'll be doing all of our roofs from here on out. Um, but I said to him, how would I have known, just from, like, standing on the street and looking up, that it needed a new roof? I still don't know that I know the answer to that. But I, um, didn't know that it was going to need a new roof, you know, which was 7,500 bucks that I didn't account for. I didn't know that dumpsters cost so much. Okay? I didn't know that. There's a lot of different sizes of dumpsters. And in my brain, the little one's big enough. And so when you think to yourself, the little one's big enough, and you go with a company that costs you. That charges you money if you're over a certain amount of weight, then what ends up happening is you have to get five dumpsters. No, I think four. I think we had four. I had total, like, dumpster drama, you guys. Total dumpster drama. I think we had to do four dumpsters. And every one of them was overweight. Other. All the contractors who were supposed to bring their own dumpster didn't and used ours. So essentially, I was paying for them to. To get rid of stuff. And then we had a contractor that was throwing concrete into the dumpster, even though it clearly says on the outside no concrete. Um, and so that ends up costing a lot just because it weighed too much. I mean, I think that it's supposed to be, like, not over 1500 pounds. And I'm like, 1500 pounds. I mean, that's 10 of me, right? It's fine. Nothing's going to cost 10 of me in weight. Oh, no. It was like, 2,300 pounds, 2,800 pounds on one of them. I'm like, what did we even do? So much dumpster drama. The dumpster would be heaping, and they're supposed to be, like, level. I would be like this, watching the dumpster, like, pull away from our house. Just so embarrassed about. I didn't want the guy driving the dumpster. Think that I filled it with all that stuff. It was all mine. And it just was funny. It was funny. If you watch my Instagram stories on Jennifer all at home, you would have seen me the day I was Talking about some of the dumpster drama. Then we had one of the contractors who should not have, but he moved the dumpster. And then the dumpster company was upset, and there was a scratch on their dumpster. Kid, you not. And so these are the types of things that ended up costing us money. I did not notice that there were some cracks in the foundation that were going to need repaired because I didn't know what to even look for. What I should have done, instead of looking at, is the landscaping pretty, or is it going to need redone? When I did the first walkthroughs, I should have been looking at the concrete foundation and looking to see, are there cracks? And would have seen that there were some that were going to need to be fixed. I should have, um. The first time we were there, even though there were wasps flying around the garage door, I still should have somehow insisted I got inside the garage or asked somebody else that was already out there walking around the garage, hey, does the garage door work? Um, what'd you see inside the garage? Like, I should have done that, but I was, like, so intimidated that I was on, essentially what was going to be a job site eventually, where the homeowner still lived, all of her personal belongings were still there. And it was like me and, like, 12 guys, you know, walking through, touring this property, and they all are construction workers. They know totally what they're doing. They're probably laughing all the way to the bank that this blonde chick, you know, got the bid on this house, because they probably knew the garage door did not go up and down and that there was termites in the garage and that no lights went on in the garage because there's tons of wiring to the garage. But somebody had cut the said wiring. So, you know, we had to, like, remove all the wiring from the garage, which costs money. So stuff like that I'm not going to ask my husband to do or my kids or anything else, because you're dealing with something that could kill someone if you. If you get the wiring wrong. Right? So, like, we just weren't going to play on stuff like that. That all costs. It all costs. Uh, and those are just things that I didn't know. You know, I also, like, didn't know some things, like, okay, if I install a dishwasher, because I've never actually purchased a home without a dishwasher. If I install a dishwasher, that means I also have to buy a garbage disposal. It's not just a dishwasher. Like, as soon as Jason said it to Me, I'm like, oh, yeah, shoot. Shucky darns. Dang it. So I didn't know that that meant we were going to have to have a garbage disposal. I didn't know that then that would also mean we would have to have some plumbing changes. I didn't know that that also meant we would have to have some new electrical run underneath the sink. Like, when you buy houses that already have a dishwasher disposal, you really don't understand how dishwashers and disposals work. Guess who does now. This girl right here. But I didn't know what I didn't know. So, you know the tuition I paid basically to learn the first time around, I didn't know that, um, you know, when the house that we purchased had a lot of what I call nipple lights. They're those round lights, like, in a bathroom, in a hallway, in a kitchen, that have, like, a round globe. It's like half of a circle, and then the little screw d hickey on the bottom. And so people just refer to them as nipple lights. Okay. So in my head, like, I just needed Jason to, like, take those down and just put in, like, you know, um, a light kit to make it into, like, a recessed light. I didn't know that we would have to fix older wiring. I didn't know we would have to get converter kits and actually have an electrician do it. So, like, those are things that I just didn't know. I went ahead and purchased a fireplace that I thought was so cute. In my head, I'm like, uh, if I'm a female and I'm looking at this house, I'm be like, the kitchen is brand new. Everything's brand spanking new. Perfect. The master bathroom is pretty much spanking new. And we've got a fireplace done. Where do I sign? This is the house I want. So I'm like, let me go ahead and purchase this lovely fireplace that I got off of, um, Menards. No, no, no. I thought it was Menards. Tried to take it back to Menards, realized it was a Home Depot. Oh, my gosh. That was a whole thing on Instagram stories one day. But anyhow, I didn't know that I couldn't just plug the electric fireplace into the, um, plugin. I didn't know that. A lot of times the wattage on those fireplaces will overload the, um, plugin. And so they're going to need, like, a dedicated circuit, which means, like, new wiring from the fireplace wall down to, like, the circuit breaker, which was, like, a lot of money. And I'm like, okay, forget. Forget that. So, I mean, I know what happens on hgtv. It' different when it's your dollars and there's no television. Does that make sense? And so, you know, that's the part that television never tells you. A lot of times that light fixture, that fireplace is the cheapest part, but it's everything that's behind the walls. And, um, you know, that needs done or fixed in order for that thing to work. That is where a lot of the money comes in. And so that's just. That's just stuff that I had to learn. Um, you know, because I just didn't know what I didn't know. And you probably have a lot of things you don't know either number. Um, three. I really should have asked my husband more about what he knew. And it wasn't that I wasn't asking him, um, but I was kind of just wanting to, like, have the pride of being able to do, you know, because I did all three Airbnb at a state. And so this was kind of like my baby. And he knew that. I mean, he's there to help. But again, like, Jason just being a me that used to be in real estate and be a man, so that just me, um, he just, he knows just a lot more about certain house things than I do. So, like, I didn't realize I couldn't just put a refrigerator in the back of my, like, a Navigator that I bought our Facebook Marketplace take in my house and didn't know that. Jason had to tell me, honey, you know, you can't lay that down in the back of your sv. I'm like, nope, didn't know. Um, I didn't know that when I bought us a new stove, um, for the downstairs kitchen in this property, because there's a kitchen on the top and the bottom level, both, which is great. But I didn't know that in an older house, because this house is like 60 years old, the plug in for the stove is a four prong, no, three prong. And we had a stove that's newer with four prongs. So there's too many male parts but none of the female parts. And so, you know, that was a trip to the Home Depot. Also, I didn't know how funny, you know, people that are helping me at Home Depot would find it when I was trying to explain to them I need, like, the male part that goes into the female part. When I was talking about another plugin one time. He thought it was hilarious. Fine by Me, I know I'm super smart about some things. This stuff, you know, I'm learning. And Jason knows so much more that I should have, like, talked about through some things with him beforehand just because I would have probably figured out, uh, what was going to be necessary more beforehand. Like, when I walked through the house the first time, I said, hey, babe, I got to take down like eight nipple lights and replace them with can lights. He probably would have said, well, don't forget that there's, like a converter kit for every light. And since the house is 60 plus years old, probably going to need some rewiring. And then I would have been like, oh, and I didn't know again, that when I want to add a dishwasher, it's not just adding a dishwasher. I also have to add a disposal. I didn't know that, but Jason does. And I didn't know that that would mean I would need a plug in, uh, you know, underneath the sink. Like, there were so many things that I just didn't know. And if I had asked my husband, he. He would have absolutely have known the answers to some of those things that I even know are questions. And so I was trying to be independent and show him I could do it all, but, you know, that turned out to be really expensive. And I have. The truth is, I have nothing to prove not to hammer to anybody else. And so, you know, um, it would just would have been smart of me to lean on the knowledge that he has. Um, you know, knowledge, like experience is free when you already live with somebody who has it and he already knows what they're doing. So, listen, I know we went over budget by a long shot. I thought it was going to be by 20 grand. It was a lot more than that. Do I wish we had spent less? Absolutely. Do we still make money? Absolutely. Um, and by the time you guys listen to this, I don't know if the house will be sold or not yet, but we're going to pray that it is. Um, but, you know, this process gave me an education that no YouTube video, no course, um, you know, with a real estate expert or whatever, no book would have been able to give me, because sometimes experience just. It costs you. It costs you some time, and it costs you some money. Um, but you can look at it differently and look at it as an investment that you could actually learn from. And so, you know, I know our next slip, it will go much, much differently because I won't make some of the same mistakes that I made on this one. And, you know, for those of you who are not interested in flipping, but you are an entrepreneur, let me just say this, like, the first time you launch something in your business may cost you something. The first time you run some Facebook ads, you may be bad at it because you don't know what you don't know. You might find there's hidden expenses to things. You making the wrong hires, you're making expensive mistakes in your business. It's stuff no one can really prepare you for. Because every successful business owner has paid some sort of a tuition. Not just to get an mba, not just to get a bachelor's degree, not just to get an associate, but they've paid a tuition, um, in other ways to get the education that they have. The street education, not the proper education. Does that make sense? And so, you know, in this case, my, uh, education just came in the form of blowing the budget on a house. So I, um, hope this is really, really helpful for somebody. If you did not listen to the last episode again, it was 054 on the real cost of our first flip house in Kansas City. I want you to go listen to that and let me know if there's any other questions I can answer for you guys about flipping this property. What else would you like for me? I just decided in the month of July. I was just going to talk about some different topics on this podcast because it's my birthday month and I can do what I want. Uh, and so let me know if you're on YouTube. Put in the comments what I could, you know, anything else that you'd like to ask? Um, you know, how we found the property? I don't know. Whatever it is, let me know. I'd be happy to do that. And, um, again, send this episode to somebody who, you know, is interested maybe in, you know, flipping their first property. Hopefully, it will help them. All right, friends, bless you. Love being here with you, and thanks so much. Bye. Bye. Well, hey, thanks for joining me today on, um, She's Equipped. And remember, growth in your business is coming from action, not just intention. So I want you to take what you heard today, pray about it, and then put it to work in your business this week. And if today's episode encouraged you, please make sure you hit the follow button so you never miss a strategy that helps you to scale your business and for more resources to help you grow, head on over to shesequipped. Com. We'll see you there.