A real estate investor and house-flipping expert has shared crucial advice for those who want to turn dilapidated properties into potential big paydays… after he admitted that he lost $1 million due to some easily avoidable mistakes.
James Dainard, co-host of A&E’s Million Dollar Zombie Flips, is one the most respected voices in real estate investing and development across Washington and has thousands of successful projects to his name.
Over the last two decades, Dainard has renovated over 4,000 homes.
But, in the process of building his portfolio, he estimates that he has lost $1 million due to mishaps that could have been prevented.
Nowadays, Dainard implements strict measures throughout the duration of every project to ensure they don’t bleed money.
Speaking exclusively to the Daily Mail, Dainard revealed the crucial measures that first-time flippers can implement to prevent budgets from going haywire.
‘I’ve at least lost $1 million to contractors over 20 years,’ Dainard said. ‘I’ve hired contractors that had fake identities and fake companies, I’ve had contractors show up to houses and re-roof the wrong house, I’ve had houses fall off.
‘Now, we have this checklist and no matter what, we have to check.’
James Dainard, co-host of Million Dollar Zombie Flips, is one the most respected voices in real estate investing (pictured)
Dainard has renovated over 4,000 homes over the past 20 years, some of which have featured on the A&E series, like this one seen here
Dainard is stringent when it comes to precuring his contractors.
‘The biggest issue that I see is people have trouble with is hiring the wrong contractor,’ he said.
‘You must vet your contractors because if you hire that wrong contractor they can take forever, they can do terrible work, they can charge you a lot because they don’t give you a clear estimate.’
Dainard explained that he and his team require a contractor to supply two referrals which are thoroughly checked, as well as valid licenses and a history of their business.
‘If you see someone that had three different construction companies there’s probably a reason they shut them down,’ he said.
To really check whether a contractor is the right fit for the job, Dainard also said he tests them.
‘We won’t give them a full house,’ he explained. ‘But we’ll just give them a little bit of work first just to see how they operate.’
If they prove to be a good fit, Dainard recommended you have a construction contract to protect against any legal issues.
Speaking exclusively to the Daily Mail, Dainard revealed the measures that first-time flippers can implement to prevent budgets from going haywire
To control budgets, he suggested ‘golden handcuffs’ for every single member on the project
He explained that one of the main ways a renovation project can go haywire is when the budget is not adhered to.
For new flippers, Dainard suggested starting with a smaller project, one that makes less money, to really learn the process of renovating.
Once a project is found, he stressed the importance of going through the budget sheet with a fine toothcomb, especially if there is more than one person on the project.
‘Everyone wants to find the best deal, but go find the best contractor, and then go look for the deal, because that’s how you can control your costs.
‘Before we even start, everyone has their allowance. It can be like “you can spend $3 on the floor. You cannot spend over. You have to be below.”
‘If you bring on more team members, you must give them the handcuffs and say, “Nope, you can’t spend it.” That’s how we control a lot of our costs.’
Typically, Dainard said that near the end of a project the budget has been maxed out leaving minimal money for landscaping.
‘The biggest issue that I see is people have trouble with is hiring the wrong contractor,’ Dainard told Daily Mail
Million Dollar Zombie Flip returned to A&E for its second season earlier this month
And for Dainard, landscaping is probably the most important element because it ties the house together.
To ensure the yard is taken care of, he suggested demolishing the yard and sowing seeds at the beginning of the build.
‘People just focus on the house right away and then their grass is all dead and they have to replace it all,’ he said.
‘Instead of having to replace all your grass, you can mow it down, start watering it, and have a company come out and put in nutrients in the first week. It saves probably $4,000 to $5,000 in grass cost.’
Million Dollar Zombie Flip returned for its second season earlier this month.
The show follows Dainard as he hunts down and renovates abandoned homes, turning distressed properties into potential million-dollar paydays.
