Episode 154: The $106,000 Mistake That Changed Our Business Forever

Send us Fan MailIn this solo episode, Josh High opens up about the devastating $106,000 loss on their fourth house flip, and why it was actually the greatest catalyst for their eventual seven-figure success. What began as a strategic plan to use one contractor for two separate properties quickly unraveled when their GC blatantly ignored the scope of work, tore out perfectly good siding and windows, and absconded with a massive deposit. Josh breaks down exactly how the project dragged on for a grueling 18 months, why trusting a realtor's ARV cost them an additional $80,000 in lost profit, and why you must never use the percentage of completion method when paying your contractors.Rather than giving up on their real estate dreams, Josh details how this massive financial disaster forced him and Tiffany to completely overhaul their business operations. You will learn the exact weekly invoicing system they now use to safely pay contractors, why a structural engineer is absolutely mandatory for foundation work, and how they pivoted to wholesaling to rapidly inject cash into their struggling business. If you are struggling with bad contractors, blown budgets, or you just want to avoid a six-figure mistake on your next flip, this episode will hand you the exact operational playbook to protect your capital. Listen and enjoy the show!You’ll Learn How To:Avoid getting "out-leveraged" by contractors who rob Peter to pay PaulProperly calculate your flip margins using the mandatory 8% ROI ruleImplement a foolproof weekly invoicing system to completely eliminate upfront depositsVerify structural foundation repairs so you can legally and safely sell the propertyUse extreme hardship to fuel a business pivot that generates massive revenueWhat You’ll Learn in This Episode:(1:59) Hiring one contractor to handle two simultaneous flips(2:25) Why you must force contractors to follow a hyper-specific, written scope of work(4:42) The danger of upfront deposits and how bad GCs steal from one project to fund another(5:41) What it means to get out-leveraged and why you must fire bad contractors fast(7:20) Why a licensed structural engineer must sign off on all completed foundation work(8:04) Never trust a realtor's ARV blindly (How trusting, cost Josh an $80K swing in profit)(8:42) The 8% Rule and how to correctly calculate your minimum required profit on a flip(10:56) Wed-Thurs-Fri Invoicing System and how to pay for materials without deposits(11:36) Why paying a contractor for 80% completion guarantees you will lose money(18:18) How losing $106,000 forced a massive pivot into high-volume wholesalingWho This Episode is For:Fix-and-flip investors who are struggling to manage contractors, budgets, and timelinesNew real estate investors looking to safely calculate ARV and minimum profit thresholdsWholesalers who want to transition into flipping without losing their shirts to bad GCsWhy You Should Listen: You will learn the hard-won operational secrets to managing general contractors, creating ironclad scopes of work, and setting up payment schedules that completely protect your capital. You will walk away with the exact blueprint to prevent contractors from out-leveraging you, ensuring your next flip stays on time, on budget, and highly profitable.Connect with the Results Driven Community:Join the free community by visiting TheResultsDrivenPodcast.comFollow Tiffany and Josh here:Tiffany Instagram: @tiffanyhighfficialJosh Instagram: @joshhighofficialWebsite: https://resultsdrivenrei.com/home/Get Tiffany’s free resource: www.rdebook.com “26 Costly Mistakes I Made While Building My Seven-Figure Real Estate Business”