Watching too many 'flipping' shows

The next house that I bought was 11th street.  (This house I will talk a lot more about - as I have retained this house after bankruptcy).

This house was bought very cheap - only $20,000, and it was a duplex that didn't need a lot of work.  This house HAD the potential to make a lot of money, if it was done right.  Unfortuantely, it wasn't.

I hired contractors to work on the house, and get it ready to be rented.  With this duplex and the first one, this would mean I would have four units, and would be accumulating a pretty nice cash flow.

When the house was almost completed, my cousin and I were walking around the house.  It was a Saturday, and we had just watched Flip this house all day.  Somehow we had the stupid notion that night to convert it into a single unit.  So he and I started knocking down walls, adjoining the units.

This resulted in several issues.  First, we had to pay contractors to work on the house as a single-family, meaning the repairs cost twice as much, and a lot more time.

When the house was finished, it looked very impressive.  However, it is in a location that makes houses hard to sell, and unfortunately, it didn't sell.  I ended up renting this house, so the duplex became a single family, I had to put a lot more money into the house and got less rent.  In hindsight, that house would have been perfect as a duplex, and I forgot a core principal in investing - always have an exit plan.  In other words, before any work is done, know what is going to be done to the house, and DO NOT change plans in the middle of the house.

I would have dumped this house in the bankruptcy, however, it is tied to a different house which is actually profitable, so I am going to keep it, with a monthly loss, for the forseeable future.

Lessons learned:

1)  Do not convert a duplex into a single unless you have a clear vision and exit plan
2)  Do not fix a house up more than it's value - never a good idea
3)  Know your market.  Watching the "Flip this House" shows made it seem to make the houses extravagent, so I put a whirlpool tub in the house, double sinks, etc, but in reality it should have been kept very simple in order to make a profit.