Confronting a Contractor on What Real Estate Investors Are Making

Ed Arriola is a successful real estate flipper, construction general contractor, and coach who shared his craziest real estate experience on the Freedom Chasers podcast. In this episode, he discussed how he and his team purchased a property in Framingham, Massachusetts, for $250,000 in 2019, with an estimated construction cost of $150,000 and an expected completion time of six months. However, due to the COVID-19 pandemic, they had to stop midway through the project and resumed work 15 months later. When they finally sold the property in 2021, they made a profit of $1.2 million instead of the expected $800,000.
Ed started his career in real estate as a contractor, partnering with someone who had the funds while he managed the project and construction. He slowly built his bankroll and eventually helped others do the same. According to Ed, having a construction background is necessary for managing the project, but you don't have to be the one doing the work. Instead, you have to know people who are good at their job, charge you good rates and can manage their schedules efficiently.
Ed also obtained his real estate agent license to cut costs and maximize profits in his house-flipping business. He analyzed the fees he pays for legal and real estate costs and aimed to cut these in half by having his own license. By dealing with smaller houses, he is able to profit 40-50% and focus on quicker deals where he can make at least $50,000 in 1-3 months.
When asked about common mistakes that flippers make, Ed explained that many make the mistake of putting too much of their own taste and style into the flip rather than considering what the potential buyer may want. Another mistake is taking on projects that are too big and lengthy, which could result in a lower profit or even breaking even due to holding costs.
Ed's best advice for new flippers is to build relationships, as the business is built on relationships. This includes building a good relationship with a CPA, an attorney, and real estate agents. He suggests having multiple real estate agents on their corner and offering a commission to anyone who brings them a deal. Building relationships with wholesalers and contractors is also important. For example, by helping them out, one can establish a network and get leads. He recommends prioritizing building relationships before even starting flipping houses.
In terms of his vision for the next few years, Ed plans to continue flipping and exploring commercial real estate. He also wants to help others become financially free and do flips if they want to.
In conclusion, Ed Arriola is a successful real estate flipper who emphasizes the importance of having a construction background, building relationships, and avoiding common mistakes in the industry. By following his advice, new flippers can achieve success in their business endeavors.

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