House Flipping for Beginners: How to Avoid Hidden Rehab Costs and Contractor Mistakes

Bradley Brumfield (00:00)
Yeah, big time. When you’re walking a property, most people don’t have the foresight or the hindsight to see all the things that could be going on. One thing about a property, it always gives you signs of what could be. sometimes things are hidden real well that you don’t see.

You know people see a pretty house, but they don’t see what’s behind the bones of the house They don’t do their inspection process to know what they’re getting themselves into firsthand I tell people all the time always do a a inspection on the property before purchase so that you kind of know what you’re getting into and that will save you in the back end of You know running into some really big problems.

Dylan Silver (02:21)
Hey, folks, welcome back to the show. Today we’re joined by Bradley Brumfield, owner of Infinity Construction in Mississippi and a multi industry entrepreneur with experience across construction, real estate investing, dealership ownership and the music business. Starting out as an electrician with an associate’s degree in electrical technology from Southwest Mississippi Community College, Bradley built his career from the ground up as a father of three. He’s focused on creating financial freedom through

Bradley Brumfield (02:31)
with experience across the spectrum.

Dylan Silver (02:49)
entrepreneurship and real estate while sharing the lessons, both wins and mistakes that helped get him there so others can do the same. Brad, thanks for joining us today.

Bradley Brumfield (02:58)
Nice to meet you. Happy to be here.

Dylan Silver (03:00)
Great to have you on and when we talk about being an entrepreneur, you certainly embraced that and we talked about some of the ways that you’re involved in multiple industries, but how did you first get started as an entrepreneur?

Bradley Brumfield (03:14)
you know, like, I started out my first journey into entrepreneurship. guess my background, number one, my dad was entrepreneur. So I actually had the opportunity to see entrepreneurship firsthand, which was great for me understanding it a little better, but I got started. my first business venture was a car dealership, that I started up and

was able to actually run and operate that thing from my home while actually being able to take care of the three kids at the same time. My ex-wife, which I’m currently divorced, she was a nurse at the time, so she was doing a lot of work off. So I was here running a car dealership, taking care of the kids. Yeah, that’s how I got started.

Dylan Silver (04:04)
That’s pretty amazing. We were talking

in the green room about how tough that business is. Certainly that’ll give you some thick skin, the automotive business for sure. When did real estate come into the lens for you?

Bradley Brumfield (04:10)
Yeah.

Yes, yes, I will.

⁓ Real estate came into the lens of, you know, I started doing the car dealership thing and then I got to a point where, like you said, you get to a point in the car dealership thing and you start realizing like, my God, it’s a lot of people dealings that you have to have and you have to have really thick skin and be a really good people person at that point and a great salesman. But real estate came about after the car dealership. ⁓

And I wanted to kind of diversify. I’ve always wanted to do investments. That was something I always had a dream of was buying properties, fixing and flipping properties, doing construction work, stuff like that. ⁓ My dad was a carpenter. Also, he was the jack of all trades. So I got into construction first, started a construction company, started doing remodels and house bills.

Dylan Silver (05:07)
Yeah.

Bradley Brumfield (05:18)
And that’s what led to my real estate investment journey. Cause I figured that if I could do the work, cause one of the hardest things with real estate investing is finding great help with doing the rehabs or whatever, if you’re fixing and flipping. So me having the background in construction, having the people, I was able to go into the real estate area where I was kind of able to.

pay myself and my company for doing the rehab while also simultaneously turning around and making the big profit at the end of the whole picture on, you know.

Dylan Silver (06:46)
Now, when you walk a property as someone who has been an electrician, you you grew up, your father was a carpenter. When you walk a property, I’m sure you’re looking at things differently than someone who may not have that background and is walking a property.

Bradley Brumfield (07:02)
Yeah, big time.

Yeah, big time. When you’re walking a property, most people don’t have the foresight or the hindsight to see all the things that could be going on. One thing about a property, it always gives you signs of what could be. sometimes things are hidden real well that you don’t see.

You know people see a pretty house, but they don’t see what’s behind the bones of the house They don’t do their inspection process to know what they’re getting themselves into firsthand I tell people all the time always do a a inspection on the property before purchase so that you kind of know what you’re getting into and that will save you in the back end of You know running into some really big problems.

I ran into problems where

one property didn’t do the full due diligence. Luckily I’m a contractor. but if I wasn’t, I would have lost really big on that property. property had plumbing issues, foundation issues, et cetera. And we literally have to redo a entire foundation on the existing house. And that was a really fun journey.

Dylan Silver (08:14)
Yeah, that’s ⁓ difficult thing.

I can imagine. I’ve seen a lot of those deals where you take up the floor and then now you’re looking through to the bottom of the home because there’s a giant crack in the foundation that you didn’t see from the outside. Inspections are challenging at times because sometimes you can’t see things on an inspection even until the point where you’re taking down a wall, you’re taking up the floor and now you’re looking at an issue. Working with a good inspector

Bradley Brumfield (08:37)
that is.

Dylan Silver (08:47)
can be a game changer though, because they might have more of a keen eye and experience towards, know, hey, this might be an indicator of a foundation issue, or this might be an indicator that there might be some electrical issues with the home.

Bradley Brumfield (08:59)
Yeah, you know when you go into a home, know cracks and sheetrock stuff like this is often our first indicator for like potential foundation movements and stuff. Electrical, it’s best to get a licensed electrician to kind of make sure that they’re doing the inspection on those things when you get into those things or have a really good electrician on hand.

One rule of thumb that I started doing when investing was taking into account all of the big factors, know, roof, foundations, electrical, you know, all your mechanicals, making sure those are accounted for in your budget, even if they, even if you don’t really need them to be replaced or done.

Keeping in mind that those things could come about and could be an issue, kind of having the foresight to say, okay, if we need a roof on this potential property, what will it end up costing me if it comes to that? ⁓ When you’re just looking at it firsthand, it may look fine, but then when you get into it, it may be an issue with the roof that needs repairing. ACs may not work. Your mechanicals may have issues that you don’t know.

going into it with the foresight to see ahead of all of those things and being able to, you know, there’s a numbers game for me when it comes to real estate. If the numbers make sense, I can make anything work, if the numbers make sense. So then knowing, go in and make offers.

Dylan Silver (11:09)
Now, you know,

when we talk about the potential issues that could come up in a home, right? I mean, like you mentioned, you have to be careful, but still some things could slip through. One of the things that I’ve thought about is, you know, when you go buy a vehicle, there’s a car fax report. Well, a home is going to be five times, 10 times the cost of a vehicle more, right? And there’s no easy way to really see

Bradley Brumfield (11:24)
Yes.

Dylan Silver (11:36)
you know, from an impartial third party, hey, what’s all the work that’s happened to this home? I think some entrepreneurs got to come out there and make some type of database for home renovations and for the history that’s been done with someone’s home.

Bradley Brumfield (11:50)
That would be awesome if someone came up with a database that would show us those things. Unfortunately, there’s nothing that I know of personally where you can go in and do a house fax, I’ll call it. ⁓

Dylan Silver (12:04)
Yeah. Now, when we talk

about renovation strategy, especially for folks who are doing some type of value add rehab, how do you decide what you’re going to update and renovate versus what you’re going to leave alone and leave as is?

Bradley Brumfield (12:23)
For me, it’s understanding the market that you’re in, number one, and understanding what people are seeking in those markets. ⁓ You know, like here, for instance, ⁓ you know, I’ve learned that one of the, well, two of the biggest things that sell homes ⁓ is kitchens, bathrooms. Those are your big sellers in any house.

And once you understand those, can always look at them and say, okay, is this outdated? Is this updated? Is this a selling point? And also I sometimes utilize realtors that can come in and tell you what the market is looking for, what they’ve dealt with when it comes to the customers, because they have firsthand experience with those customers.

so realtors always great help when it comes to saying, Hey, we should, you know, kind of look at this kitchen and maybe update that cause it would sell it better. They’re the ones going to end up doing the selling. So you want to kind of follow the blueprint of what they understand, but you have to have a really great realtor that also has a vision as well. Or you get your design, you know, or a designer that can come in and help you design.

Dylan Silver (13:38)
from an arresting standpoint.

Yeah, I mean, you have to have those people who have that investor lens, right? Because most of the time people are coming at it as if it’s their home, right? So if a realtor, they’re looking at it at least in some capacity through their client’s eyes as a homeowner, but it takes a certain type of person to be able to identify the characteristics as an investor. Now, pivoting a bit here, Brad, you know, when when folks are looking at

Bradley Brumfield (13:44)
⁓

Dylan Silver (14:12)
their first investment and they’re doing some type of rehab to the home and they don’t have a construction background. So they’re coming into this and they’re trying to find something. What do you think is a good scope of work for someone who’s starting out? And then also too, how do they avoid making mistakes with managing contractors?

Bradley Brumfield (15:14)
Number one, managing contractors is understanding the numbers game and you have to start doing your research on your numbers game. ⁓ You know, you may have some contractors that come in and overcharge you on stuff and you don’t even know it because you don’t know that area that you’re sitting in. ⁓ It’s always good to get multiple estimates from different contractors.

But you also want to do research on the contractor, get references and other people that have spoken well and see how they speak about the contractors. Do your due diligence on your contractor is number one for sure, because you don’t want to go into this thing with a shady contractor and you’re spending $70,000 on a rehab or more or whatever or less.

is big money that could tank your entire business plan out the gate if you don’t do your diligence with finding and hiring the right people that have references and people that can speak up and say, yeah, they did this work for us and they did great. They were on time. They did what they said they were going to do. They showed up. Their guys was very professional. They were neat. They were clean.

you know, and dig into the background of these contractors before you get involved with them, because I hear so many stories and I’ll be honest, that’s one of the things that has kept me in the construction business and helped me do well. ⁓ I had this motto, do it right the first time and you won’t have to call me the second. You know, people always have kept me in business with a lot of these shady contractors that just, know, and this, you know, no.

Dylan Silver (16:52)
Yeah, that’s exactly right.

Bradley Brumfield (17:01)
shots at anybody in particular. It’s just for me, I’ve stayed in business fixing problems of shady contractors that don’t do the job right the first time. I

Dylan Silver (17:13)
You know, one

of those things that’s most challenging about, you know, doing any type of rehab, whether it’s something as small as, you know, and I wouldn’t even say this is small, but some type of electrical work to, you know, floating a foundation and roof the studs rehab is you’re trusting someone, especially if you don’t have a background as a contractor, as a carpenter in construction, you’re trusting them to say, here’s the cost.

Here’s how much time it’s gonna take. Even if you get quotes, now you’re reliant on that person to meet a deadline, right? And so if anything happens along that process, now they’re holding it up, you kinda are in a position where, hey, do I find someone else? I’ve already paid this person, what do I do now? That’s a tough spot for a lot of people to be in.

Bradley Brumfield (17:48)
That’s it.

Yeah, you know, you always want to have the backup guys, you know, number one to fall back on if, especially when you’re doing fix and flip stuff, you don’t want to be in a space of this is the only contractor I have and can go to because now you’re at the mercy of that person. And if you don’t understand who that person is, or y’all haven’t developed a great relationship in the working space already,

You don’t really know what you’re dealing with unless you have went and gotten those references from other people that have dealt with that contractor and, you know, speak highly of that person or whatever. And, you know, my track record in the construction industry has spoken for itself. have a multitude of, you know, references from, you know, customers that are very happy with the work we’ve done. We’ve always shown up, done what we said we were going to do.

You know, that speaks volume in this industry and finding the right person is probably the biggest portion. If you don’t have a construction background, getting into flipping could definitely be the make or break moment for you in that, in that industry. And, know, everybody thinks that you can just get in it and, you know, go full blast. if the numbers make sense for me,

Dylan Silver (19:11)
Yeah, that partner is huge.

Bradley Brumfield (19:27)
If the numbers make sense, can do it. But for a person that doesn’t have my background, it’s more than just the numbers. It’s the people, it’s the network, it’s the…

Dylan Silver (19:35)
Yeah, you

you bring up a good point about that relationship being pivotal. To me, I would almost go as far as to say like, if this is your first flip, you know, potentially, and I know some people would disagree with this, give away some equity and the deal to an established flipper and recognize, hey, it might have taken you a year to find this perfect flip. But this established flipper

Bradley Brumfield (19:54)
part.

exit

Dylan Silver (20:01)
You have to trust them as well too, but they can manage the contractors. They’re gonna have equity at risk as well, so they want it to succeed just as bad as you do.

Bradley Brumfield (20:11)
Correct, exactly. And that’s the key thing. Like when we said, when we started this, we said learning from other people’s mistakes instead of your own. So if you partner with a guy like me that has done it or someone else that’s in the industry that has done it and has a proven track record, can show it on paper, can show that they pulled it off and have done it and repeated multiple times, ⁓ that can be very pivotal.

and you learning the process first because you don’t want to go into it blind. Partnering up is always a great go to when you’re starting out and fixing and flipping or rehabbing homes or trying to get into the business.

Dylan Silver (20:54)
We are coming up on time here. Any new projects that you’re working on and also what’s the best way for folks to reach out to you?

Bradley Brumfield (21:02)
I guess the best way to reach me is [email protected] which is pretty long. but then we also have our, our website, which is, www.infinity construction ms.com, which is our website for our construction company. that would probably be the best way to reach me. ⁓

I’m not widely accessible. I’ll be honest. I don’t like to deal with everybody. you know, time is valuable for me. And I, you know, I try to deal with people that are serious about whatever they’re doing. And if, you know, even when it comes to customers I work for, I’ll be honest, we’re at a space where we kind of screen our customers and who we decide to work for, because we don’t want to burn our time on someone kicking tires, you know.

Yeah. So yeah.

Dylan Silver (21:53)
100%. Bradley, thank you so much for your time today. Thanks for joining the show.

Bradley Brumfield (21:58)
Yes, sir. I appreciate it, man.