Kevin Hart’s Journey into Real Estate
After venturing into his own insurance agency, Kevin Hart found himself swamped in debt. However, he managed to turn his fortunes around by flipping homes and has since transitioned to full-time real estate investment. Hart advises aspiring investors to begin with property flips but warns them to be cautious about making costly errors.
Facing Financial Obstacles
Kevin Hart was not immune to financial challenges after launching his own State Farm branch in 2017. Reflecting on this time, he shared with Business Insider, “I was dead broke and at a failing insurance business. I had a $50,000 business loan I had to pay back at some point. I had a bunch of credit card debt from trying to get that business going.”
Turning Things Around
Fortunately, Hart didn’t stay in debt for long. In 2019, he completed his first home flip, earning him approximately $30,000, which he shared with his business partner at that time. By the end of that summer, he executed two more flips, ultimately deciding to pursue real estate full-time. This new path helped him eliminate his debt within two years, as he stated, “There’s not much else out there where you can make lump sum checks to help you pay off that debt.”
Partnering for Success
Today, Hart collaborates with a new business partner, Mike Gorius. In 2024, they officially established a partnership under the Joe Homebuyer franchise. In their inaugural year, they successfully executed 50 transactions, combining wholesales, wholetails, and flips, and now own over 20 rental properties in the Louisville area. Their property ownership and deal history have been verified by reviewing settlement statements and closing documents.
Advice for New Investors
Hart and Gorius recommend that novice investors consider kicking off their journey with a flip to quickly generate capital. Hart’s dual strategy—flipping and wholesaling for immediate cash, followed by renting for long-term income—proves effective.
Common Pitfalls to Avoid
However, they stress that flipping homes comes with its risks. To help mitigate these risks, they identified three major mistakes to avoid:
- Choosing the Wrong Contractor:Hart emphasizes the importance of selecting the right general contractor, stating, “You definitely don’t want to hire the cheapest one you find. They’re probably cheap and available for a reason.” It’s essential to interview several candidates, check references, and examine their past work.
- Overcommitting:“Don’t take on a project that’s way bigger than you can handle,” warns Hart, noting that it’s easy to get carried away after watching renovation shows. He suggests targeting simpler projects, such as a 3-bedroom, 1-bath ranch-style home that requires cosmetic upgrades. Gorius adds that investors should aim for finishes that appeal broadly rather than highly personalized designs.
- Overly Optimistic Projections:Hart advises being realistic when estimating costs and timelines. “Get really good at running your numbers,” he says, noting that it’s crucial to allow for unexpected expenses that can arise during renovations. Ensuring an accurate budget is essential to avoid financial pitfalls.
