Self-made millionaire Sidney Torres built his fortune renovating houses in New Orleans . Today, he uses his money and expertise to help struggling property investors on CNBC's " The Deed ."
In an upcoming episode of the show, one investor, James Brooks, has fallen in love with a house he's been working on for three years and finds himself not only out of money, but nearly half a million dollars in debt.
Brooks' situation is a good reminder of one hard truth about real estate: A renovation can easily turn into a million-dollar money pit, especially if you become emotionally attached and delay selling.
In Brooks' case, "I'm paying property taxes every year; I'm paying insurance; I have to carry a builder's risk," he tells Torres. Despite the money he's throwing at the property, he's having a hard time letting go: "I've been stuck, that this is my house. Still, right now, it doesn't seem natural to have the conversation that I would sell the house, but the truth is, if I don't do the deal, I'm just destined to let it sit."
Rather than letting it sit for another three years, Torres helps Brooks bring his center-hall cottage back to life in just over three months and encourages him to put it on the market.
They list the property, which Brooks bought for $230,000 and invested another $240,000 into fixing it up, for $1.35 million. That would leave him with $880,000, grant him financial freedom and allow him to buy and flip more properties.
If you want to be a successful home flipper, you can't let your emotions get the best of you, says Torres: "Don't fall in love with it because it won't love you back."
Watch Sidney Torres in CNBC's "The Deed," premiering Wednesday, June 13 at 10:00 PM Eastern.
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