Thank God I’m Flipping

Build with your brand in mind
25 Jun 2014

Build with your brand in mind

Ryan Brignac is a licensed commercial/residential real estate developer for Skyy Bridge Developers focused on the New Orleans area. After Hurricane Katrina, he started flipping properties to help revitalize the comeback of New Orleans and has not stopped since.

GARD Pro Not Registered

The property: Single family home in Harvey, LA
Purchase price: $28K
Valued after rehab: $159.8K
Start and end date of rehab: I started this rehab on December 23, 2011 and finished on February 4, 2012 (2 months)

Why did you choose this property?
The major factor you need to take into consideration when you are buying investment properties is the location of the property and the resale value.

This property had a decent size lot, foundation, driveway and about ¾ good framing, all for $30K. Other lots in this area alone were selling for $45K and I couldn’t understand how no one saw the opportunity that I did.

I chose this specific property because of the vision I had when I first saw it. Your mind has to have a great imagination to see the finished product immediately following your first walk through. Although it was on the tear-down list, I saw the potential it had and envisioned turning it into a beautiful, completely remodeled, 4 bedroom, 2 ½ bath. It also had a very open floor plan with plenty of space for decorating which I knew would be attractive to buyers.

Were there any problems with the property when you purchased it?
Absolutely, it was full of problems. I knew about 90% of them going in and just had to take them one by one as new ones arose.

GARD Pro Not Registered

The main problem was with its framing. There was fire damage on the middle floor so we had to do a lot of restructuring. We also kept running into issues with building codes in the past that had changed. Because this was a complete remodel, we had to upgrade to today’s standards

As a contractor, you will always run into problems. You just have to find the correct solution to fix them as fast as possible and move on. It also helps to be able to do an estimated cost analysis in your head during your first walk through. Luckily, most of the problems were small and could easily be fixed so it only increased my budget a little.

Before After front of house

What was your initial budget? Did you stay within that budget?
My initial budget was around $80K, however, we exceeded that by $10K because of some of the fire damage that needed repairs.

The biggest upgrades were that the stairs had to be reframed with 3 stringers, the windows all needed another header, the plumbing needed to be rerouted, the whole house needed to be rewired and we had to make sure all the electrical outlets and breakers were up to code.

What did you spend that majority of your budget on?
The majority of the budget was spent on upgrades. The buyer basically received a brand new home from the inside as we did a complete renovation from all new electrical wiring to stainless steel appliances and fixtures. The only thing that was solid was the brick front exterior and about 80% of the interior framing studs, everything else was replaced and renovated.

One of the most expensive upgrades we completed was the kitchen. We went with solid oak cabinets and picked from a higher class granitite. We also put better doors in the house that were more solid than your normal hollow core door.

What are some tips you have for other rehabbers to cut-costs during a renovation?
The best way to save money is to make sure you purchase the property at the best price possible. If you buy right, you can always discount your property for a good sale and come out with a nice profit. You can also cut costs by being your own salesperson and contractor.

On other hand, do not go cheap on your master bath and kitchen. I would not advise using all cheap materials and cheap labor. The old saying, “you get what you pay for,” is true. If you don’t care about your product and resale brand, in the long run, you will end up giving yourself a bad name as people will recognize you as a cheap developer.

Another tip is to not over build for the neighborhood. I always refer to the comps recently sold, what’s under contract and what is currently listed. Deals that are sold or under contract will always provide you with a detail of what other buyers liked. If your neighborhood is calling for a more high class client, you will not get away with putting in cheaper products.

The flip side to that is if you are in a small middle class neighborhood and you start putting in the most expensive kitchen cabinets, fixtures etc., then your costs will far outweigh the sales prices of recent comps and you will find yourself in trouble.

The best advice I can give is do your homework. Know who your retailers are (big and small), who sells what and at what cost, what they specialize in and where you can get the best deals. Then, you can determine what you are willing to put into your project. Even if you have to buy from 5 or 6 different retailers, so what? It’s a numbers game and you need to watch your numbers like a hawk.

Did you sell the property? If so, how did you market it?
Yes, we sold it 4 months after purchasing it—including the time it took to rehab it. Our company’s reputation attracted people to the property. Along with the layout and price, it was an easy sell.

We list all of our homes on the MLS for our local realtors and put them on sites like, Zillow and Trulia for extra exposure. We also send emails to agents directing them to our website where they can see what projects we are working on and the rehabs we have completed.

I’m a normal figure at our local investor meetings where I pitch what deals we have currently on the market, what we’re working on and what we’re looking for in the future.

I am also a big believer in using social networking for real estate. I’m always boasting fliers of my projects through social media. This provides me with a much larger platform to work with as we know exposure is the best key to your business growth.

Bridnac Before After v1 4Jun2014 EC

What, in your opinion, added the most value?
The master bath and kitchen. We tend to spend extra time on kitchen renovations as it is where a lot of people spend most of their time so we want them to feel comfortable. If the kitchen doesn’t have a good feel or flow, it won’t make a buyer feel good.

The bathrooms are also important because you want to provide a place where buyers can wind down and relax. For this property, we upgraded the bathrooms by adding all the new fixtures, cabinets and counter tops.

Was there anything you would have done differently?
The only thing I would have done differently would have been to put hardwood floors and crown molding in all the bedrooms, but because our budget, we decided not to.

Putting in hardwood floors adds a tremendous value to any project. Depending on the size of a property and its resale value, it could increase the value of a property by 10-15%. But again, you have to look at what the comps are in the subdivision you are flipping.

Bridnac Before After v3 4Jun2014 EC

What tips can you provide to investor rehabbers?
You must always know your limits, the max dollar amount you want to invest and keep your emotions out of the deal. If you’re feeling bad that day, are in a bidding war and just want to flaunt your ego to outbi
d the other bidder, do not bid.

If you get caught up in the excitement of the bidding, or if the seller does not want to accept your low offer and now you are considering paying asking price as you think you can find ways to cut costs once you’re in the house, do not bid.

Trust me when I say, you will lose and regret the deal if any one of the above happens. Once you sign on the dotted line, you are committed to the deal. Wouldn’t you rather spend your time enjoying your deal and the product you are building than constantly worrying about how to get your numbers down?

You must also know your craft and investment strategy. People that really add value to a property don’t take shortcuts and their properties will be the ones that stand out. Novice flippers that cut corners and aren’t worried about the quality of their finished product won’t last.

Overall, develop a brand to model yourself after and stick with it. In the long run, having a quality product and a good brand will hold stronger in rough markets than using cheap developers, materials and labor. Eventually it will catch up to you either in a good way or bad. So stick with a value investment plan.

Failure is the path to success
19 Jun 2014

Failure is the path to success

Nate Armstrong worked as an executive at Target before deciding to pursue real estate full time in 2007. By 2008, he founded Calhoun Ventures. Today his company is active in 6 states and has produced nearly 500 turnkey rental houses for investors.

GARD Pro Not Registered

The property: Single family home in Minneapolis, MN
Purchase price: $105K
Valued after rehab: $180K
Start and end date of rehab: We started this rehab on November 15, 2013 and finished it on December 30 (6 weeks)

Why did you choose this property?
We chose this property because it was a 1 ½ story house, with a very popular and resellable style. The master bedroom and bathroom sat on their own story, permitting additional privacy. That, combined with the pleasantly low price we were able to purchase it for, made for an easy decision to renovate it.

What was your initial rehab budget? Did you stay within that budget?
Our initial budget was approximately $35K and we were able to stay within that number because of the inspector we hired. He was thorough, experienced, trustworthy and had scrutinized hundreds of houses for us in the past. We owe our accurate budget estimates to his detailed report and what each repair he recommends should cost.

What did you spend that majority of your budget on?
We spent a majority of the budget on the kitchen and bathrooms. These are usually the most important rooms to people because it’s where they spend a majority of their time and they want them to look nice. A poor shower or stove burnercan be all it takes to send a great renter right out the door.

Fortunately, not too many features in the kitchen and bathrooms needed major replacements. The kitchen we cleaned up, retiled and installed new appliances in, which is a pretty standard procedure in all our flips. The bathrooms however came pretty immaculate as is. Besides a little cleaning, they only required new mirrors and vanities.

GARD Pro Not Registered

Don’t fix it if it isn’t broken!

What are some tips you have for other rehabbers to keep within budget?
Establish a great rapport with your contractors, but bear in mind that they are your employees. Before your contractors start work, always agree with them in writing what their work must produce.

That way, if they fail to fix something that you hired them to do, you can expect them to return to the job site before they should receive their final payment. This saves you the heartache of having to hire a second contractor to remedy the first one’s omission, or worse, having to give yourself an impromptu lesson on tiling or drywall so you can make the last-minute fix yourself!

Another piece of advice is that cheaper isn’t necessarily better.

For example, when you buy a toilet, know that the cheapest toilet has ultra-narrow pipes which will clog quickly or that when you buy a sink, the cheapest ones are made of steel so thin that a dropped butcher’s knife could easily pierce it. The plumber is the highest paid type of contractor, the less time he spends in your house, the better.

It’s also very tempting to stylize and personalize each house you renovate on a case-by-case basis. However, pouring over catalogues and making certain your contractors have received the precise backsplashes, carpeting and door handles you’ve ordered for each house eats up a lot of time. Pick one standard set of appliances and accents that all of your houses will receive. Standardization translates to time and money saved.

Did you sell the property? If so, how did you market it?
In this instance, we first sold the project idea to an investor who partnered with us on the fix and flip. We love working with investors personally so we can understand precisely what they expect from their investments and meet their expectations.

After we renovated this property, we listed it on the market with our realtor. We put up yard signs and held an open house and after just 18 days, sold it to a family that had been shopping in the area.

What in your opinion added the most value?

Quality materials and attention to detail are key to differentiating a good property from a great one.

Durable and attractive appliances are a must in every house, as are their complementary accents.

Neutral colors throughout the house will also appeal to the greatest number of people—beiges and whites aren’t bland, they’re soothing and go with anything. Making certain that everything matches and is the simplest way to ensure a property’s lasting value.

What tips can you provide to investor rehabbers?
Too many would-be great investor rehabbers only scratch the surface of the investment scene and stick to educating themselves on mistakes rather than taking the all important first step into a real investment. Experience is the finest tutor, so know that even a misstep can provide a great lesson.

I admire the spirits of men like Alexander Fleming. When Fleming accidentally let some of his bacterial specimens get infected by mold, he didn’t complain about the waste of his resources to contamination—he studied them. As the result of his error, Fleming discovered penicillin and consequently made one of mankind’s greatest contributions to modern medicine. Failure is not the end of success, it is the pathway to it!

Coming in under budget
13 Jun 2014

Coming in under budget

Eric Workman is the Vice President of Sales and Marketing at MACK Estates where they specialize in rehabbing properties and is one of the largest owners and managers of single-family rentals in the Chicagoland area. Learn why doing a thorough investigation of a property has kept this team under budget.

GARD Pro Not Registered

The property: Single family home in Homewood, IL
Purchase price: $120K
Valued after rehab: $239.5K
Start and end date of rehab: We bought this rehab on September 5, 2013 and finished on January 10, 2014 (4 months).

Why did you choose this property?
We chose this property because we had already completed other projects in Homewood so we were comfortable with the municipality, neighborhoods and buyers. Market trends for rehabs in this area have also shown property values to be on the rise and it’s close to some of the best school districts in the southern suburbs.

What was your initial budget? Did you stay within that budget?
We actually came in under budget. We had anticipated a longer construction schedule than what had actually occurred so we were able to save on labor and holding costs. Our initial budget was $75K and we only ended up spending $72K.

Workman Before After v3 4Jun2014 EC

What did you spend the majority of your budget on?
Most of our budget was spent on updating almost all areas of the property – improving the exterior, landscaping, patios, kitchen and baths along with the major mechanicals. We ripped out the old, rotting back porch and replaced it with two concrete patios, new landscaping and mulch. We also removed all existing shrubs in the front yard and cleaned up the existing plants that weren’t destroyed/dead and painted the entire exterior of the property.

GARD Pro Not Registered

Our company is synonymous with “like new” construction and we pride ourselves on turning over a property that lives up to today’s buyer standards.

Were there any problems with the property when you purchased it?
Nothing out of the ordinary. We have been doing this business for 16 years and have seen just about everything that can come up in a project.

That being said, we go to great lengths to investigate a property’s condition and construction expense and run a preliminary scope of work for every project before we put an offer on it. That way, we can estimate what the construction costs are going to be. The scope is also run at a “worst case scenario” (one of the reasons why we came in under budget on this one).

Workman Before After v1 4Jun2014 EC

What are some tips you have for other rehabbers to keep within budget?
First and foremost, it’s important to allocate budgeted dollars to capital expenses. You don’t want to go into a project with too low of a budget allotted for construction costs, run into unforeseen issues and be left with the option of either: A) not fixing the issue properly, or B) having to spend more money than originally planned, crippling your projected margins.

You should also anticipate your needs. If you do a thorough investigation prior to taking on a project and employ assistance from skilled general contractors, you can stay ahead of any and all issues that may occur.

Workman Before After v2 4Jun2014 EC

What in your opinion added the most value?
It’s tough to credit that to one particular item. As a whole, labeling a property on the MLS as “recently rehabbed” has a multitude of different meanings – real estate agents can say this if they have done something as little as add lighting fixtures.

The thing that separates us from the competition or “adds the most value” isn’t one item specifically, but more so the entire property as a whole. However, if we had to pick a room, it would likely be the kitchen.

For example, a 4 bedroom, 2½ bath home in a great school district is going to attract a family. If the kitchen isn’t spacious and functional, along with being up to today’s standards of quality and design, the property isn’t likely to sell.

Workman Before After v4 4Jun2014 EC

Did you sell the property? If so, how did you market it?
We listed the property for $239.5K and sold it in 17 days for our asking price to a homeowner who was eager to move their family into a quality home within the school district.

We actively marketed the property by listing it on the MLS and a multitude of other online platforms, as well as holding an open house and informing our extensive broker network of the new property.

What tips can you provide to investor rehabbers?
Don’t get fooled by the looks of a property, e.g., fresh paint, new kitchen, etc. Do your due diligence to determine the state of the plumbing, HVAC, roof, windows and any other big-ticket items prior to purchase. These are capital expenses in every property that could cripple your returns if not done right the first time.

Any “flipper” can put in a new kitchen and paint the walls a pretty color, but it takes a re-developer to provide a property that is up to new construction standards.

Flipping success in a smaller city
20 Dec 2013

Flipping success in a smaller city

K&V Investment Group is a real estate company focused on distressed property rehabilitation, management and investment sales. Their goal is to grow their portfolio steadily, aiming for long-term success through all economic and real estate market fluctuations.

GARD Pro Not Registered

Company: K&V Investment Group
Co-founder: James W. Vermillion III
Location: Lexington, KY
Years experience: 3
Number of properties flipped: 2-9 currently under contract

Why did you decide to start flipping real estate?

I initially became interested in real estate because of the abundance of options. With so many strategies, financing options and types of investments, it was only a matter of figuring out which strategy best fit my goals and personal situation. After researching, I decided rehabbing was a good starting point.

How did you get started?

After I decided to start rehabbing, I teamed up with a personal friend and we spent several months learning all we could about the business. As we were learning, we constantly developed and modified our business plan until we felt comfortable enough to start executing.

GARD Pro Not Registered

With our business plan in place, we set the foundation for our flipping business. We formed a Limited Liability Company (LLC), met with potential lenders, became licensed agents and began our search for contractors. At the same time, we were hunting for our first property to rehab. We went to foreclosure auctions, searched the MLS and bid on online auctions, all with no success. While frustrating, we continued searching until we got our first property under contract.

How do you decide where and what to buy?

We look for properties in desirable areas that we can buy at a discount, which enables us to renovate the property and exit with a profit. You cannot rely on one indicator to analyze a property and need to consider as many variables as possible to ensure you are purchasing the right property at the right price.

How do you find your properties?

We search the MLS daily and do our best to keep tabs on the market and maintain an awareness of changes in conditions. In addition to using the MLS, we discuss investing with other real estate investors which can lead to opportunities. Recently, we have seen the market tightening up and have expanded to several smaller cities and towns where there is less competition.

K&V bathroom before and after

How do you finance your real estate investments?

The majority of our purchases are financed through the commercial lending portion of a local bank. The lender finances both the purchase and rehab costs, which leaves us responsible for the down-payment, closing costs, holding costs, renovation costs beyond the approved budget and any other associated costs.

In addition, we have started using a hard money lender when a fast closing is required or we are unable to get financing from the bank. In a few circumstances, we have also used private funds and plan to expand that method in the future.

What are the most common rehabs you have to make when flipping a property?

First impressions are critical to buyers, so enhancing curb appeal is important to make a quick sale. While landscaping and exterior improvements do not always need to be drastic, presenting a clean, attractive property will go a long way in getting people in the door.

Once in the door though, we provide a “new” looking home that is consistent throughout.  I always recommend rehabbers budget for a professional paint job, new light fixtures, interior doors, door and cabinet hardware, floors, etc. There are times when not all of those items will need to be replaced, but unless they look brand new, we upgrade them.

How long does it typically take for you to complete a flip project?

Usually between 4-6 months, although project lengths have varied from less than 2 weeks, to 9 months.

What are some ways you sell the property once you have completed the rehab?

We start by marketing the property while the renovations are underway. This can lead to a contract to sell before the property is even completed, limiting the holding expenses. When it comes to marketing our completed rehabs, we do not do anything special. Since we are licensed and real estate agents, we list the properties ourselves.

K&V living room before and after

How much do you typically make on a flip?

Unlike many rehabbers, we have experienced a wide-range of profit levels due to the range of properties we have flipped. Rehabbers in larger markets are able to focus on a few areas where most properties are very similar, thus they have little variance in purchase price, holding costs, rehab costs and ARV.

Being in a smaller market, we have had to take on a variety of projects, from historic single family properties, to townhouses and duplexes. In addition, the scope of work in our projects has ranged from primarily cosmetic to complete renovations.

Have you lost money from a flip?

While we have made our share of mistakes, we are fortunate to have not lost any money on a project. I credit this to focusing a lot of energy on analysis ahead of purchasing and including contingency funds in our budget for unexpected events or holding time.

What is the most common way people lose money when flipping properties?

There are several very common errors that lead to most failed flips. The first is overpaying for a property. The profit in flipping comes primarily from the purchase, so being able to identify solid flip candidates and purchasing them for the right price is a critical step. Overpaying for a property dooms the deal from the beginning.

Another common mistake is underestimating the rehab budget and timeline. Investors are notorious for using best-case scenarios in determining the renovation cost and timeline, which leads to blown budgets and additional holding costs.

The other major mistake I have seen repeatedly is overestimating ARV, again, due to using best case scenarios during analysis. This happens when rehabbers pick comps that support the top price point, and ignore those that validate a lower price.

What are some things you recommend staying away from when trying to increase a property’s value?

There aren’t any specific aspects I would warn investors about, just make sure you do your due diligence. We have rehabbed properties with foundation issues, water damage, mold, etc., and while many investors look at those problems as red-flags, we look at them as potential opportunities. The key is to make sure you are aware of the issues and are able to accurately budget for the solution.

Not sure what house flipping is? Read our article 4 essential house flipping rules for beginners to learn more!

Making 20% returns on part-time rehabs
29 Nov 2013

Making 20% returns on part-time rehabs

JS2 Homes is an investment firm that specializes in buying, rehabbing, redeveloping and reselling single family and multi-family properties.

GARD Pro Not Registered

Company: JS2 Homes
Name: Justin Silverio
Location: Methuen, MA
Years experience: 2
Number of properties flipped: 8

Why did you decide to start flipping real estate?

My father has owned a general contracting company and has owned rental properties since I was born and was always encouraging me to buyrental properties to create passive income. None of this really interested me until about 6 years ago when I was working 70+ hours at my accounting job and knew there had to be an easier way to build wealth.

I’m a big researcher, so I spent the next several years researching different real estate strategies to identify which I would enjoy the most and which had the greatest potential to build capital. That’s how I decided on rehabbing.

How did you get started?

GARD Pro Not Registered

Since I had a full-time job, I discussed the opportunity to partner on the rehabs with my father. I would be responsible for the acquisition, cash management, marketing and would assist on the sale end, while he would project manage the subcontractors on a day-to-day basis.

Once we understood our roles, I created a business plan to pitch our business to several local banks to gain funding. We had multiple banks that agreed to lend to us so the next step was to actually go out and find a property.

My first deal came from a real estate agent that I had been networking with for some time. He was also a rehabber and provided insight into what the property could be once completed. I walked through the property, taking pictures and notes and came up with a rehab budget. Once I was confident in my numbers, I submitted an offer and it was accepted.

To this day, I am working full-time and rehabbing part-time. For others that have a full-time job and want to start flipping properties on the side, I would say that the most critical component to achieving this is to create systems and procedures so that you can minimize your involvement in your rehabs.

JS2 kitchen rehab

How do you decide where and what to buy?

We start by looking in areas that we are familiar with. We also spend many hours driving through neighborhoods, talking to local real estate agents, attending open houses and researching demographic studies, immigration and business trends to understand what towns, neighborhoods and streets are most desirable and have the largest potential for growth.

This research provides us with the information of what types of houses our buyers want. For instance, we know that we will have an easy time selling a 3 bedroom, 2 bathroom colonial-style property, but will have some difficulty selling a 2 bedroom 1 bathroom bungalow.

We are constantly researching trends and what homebuyers want so we can adapt appropriately. This is crucial to our success and the success of our investors.

How do you find your properties?

We tap into multiple channels to find our next project. Here are some of the things we do on a consistent basis:

Because of our consistency, we have been able to get a deal through just about every one of these techniques.

How do you finance your real estate investments?

We fund our projects using contributed cash from a business line of credit and/or rehab loans from community banks. We have also created solid relationships with the local banks that have provided favorable rates and the flexibility to close deals quickly. Each project is analyzed to identify which funding source makes the most sense, how quickly we need to close and which source(s) will provide the greatest return on our cash.

What is your typical budget on a flip?

Most of our rehabs range between $70-85K.

What are the most common changes you make when flipping a property?

Most of our projects require major cosmetic repairs. This includes fully gutting a house, reconfiguring floor plans, rebuilding walls and/or remodeling kitchens and bathrooms. It’s hard to find a property where only minor cosmetic rehabs are needed.

How long does it typically take for you to complete a flip project?

The amount of time to complete a project varies depending on the amount of rehabbing a property needs. We have completed projects in as little as 3 weeks and have some that took up to 10 weeks. A good standard to go by is that it will take 1 week for each $10K of work needed.

JS2 living room rehab

What are some ways you sell the property once you have completed the rehab?

To begin with, we always list our properties with our in-house real estate agent. We also perform a market analysis a week prior to listing the property to identify the market value of the home. In a sellers market, we will list the property at market value and in a buyers market we will list slightly below market value to ensure a quick sale.

We also try to incorporate special features in our properties that you wouldn’t typically find in other homes selling in the price range (i.e., granite countertops, hardwood flooring, tiled bathrooms, high end appliances, etc.) and always have large “We Buy Houses” signs on our properties. These signs have provided us with several homebuyers also.

How much do you typically make on a flip?

We typically make a minimum of 20% return on our investment.

What are the most common ways people lose money when flipping properties?

Two of the most common ways people lose money is by overestimating the ARV (After Repair Value) and underestimating the rehab costs. The ARV is the price at which the investor believes the property will sell for on the back end of the project.

ARV – (rehab costs + purchase, holding and selling costs + profit) = purchase price

As the flipping formula is based off the ARV, overestimating the ARV will result in an inflated purchase price. Once an investor buys at an inflated price, the only flexibility in the flipping formula (assuming the rehab cost is accurate) is the profit. Therefore, the investor’s profit will be reduced due to the inaccurate ARV.

Similarly, if an investor underestimates rehab costs and all other variables in the flipping formula are accurate, the profit will decrease.

What are some things you recommend flippers always rehab?

Most people have heard that kitchens and bathrooms sell homes and we would have to agree. Some other aspects, although smaller in cost, that we recommend updating are door hardware, new carpeting and putting a fresh coat of paint on the walls.

We also recommend that rehabbers research their markets. If a typical home in the price range that a rehabber is going to sell a home has laminate flooring or carpeting, use laminate flooring and carpeting. You don’t need to spend the extra money on hardwood flooring and tile because you won’t get the return on your investment.

Not sure what house flipping is? Read our article 4 essential house flipping rules for beginners to learn more!

From sweeping floors to owning doors
15 Nov 2013

From sweeping floors to owning doors

Engelo Rumora is a turnkey real estate professional and works with a house flipping team who have a combined experience of over 20 years. He is currently located in Kansas City, Missouri and in 4 years, has flipped over 40+ properties in the US.

GARD Pro Not Registered

Why did you decide to start flipping real estate?
Real estate has been a big passion of mine for the past 4 years. When I initially entered the workforce, I started working as a laborer on both residential and commercial sites. After working long hours for minimum pay, I eventually started looking at other opportunities where I could make money, but not have to work a 9-5 job. Getting involved in the real estate industry seemed like a good way to do this.

How did you get started?
Not knowing much about the real estate industry, I decided to educate myself as much as possible and look for work in the field. After knocking on many doors, I ended up working as a buyer/seller’s agent.

It was a perfect mix which eventually led me to flipping houses. Laboring gave me knowledge of the construction side of flipping while working as a buyer/seller’s agent gave me skills in sourcing, negotiating and I learnt how to work with investors one-on-one.

Kitchen before and after

How do you finance your real estate investments?
It all depends on the demand. I work with a team of people and we use our own funds, but also have access to hard money lenders in both Australia and the US. Out of the 35 deals we flipped this year, half were financed with our own funds and the other half were with loans.

GARD Pro Not Registered

How do you decide where to buy and what to buy?
There are certain areas we prefer. When I moved from Australia to Kansas City a year ago, it took me a while to get a good understanding of where and what to buy.

We also established relationships with the right people. Most of the people we flip houses with own numerous properties in the area and have extensive knowledge on the streets and types of houses that are good prospects for flipping.

How do you know a particular property is available?
I like the saying “leave no stone unturned.” We have established relationships with numerous bird dogs, wholesalers, realtors, etc., who know our criteria and that we are genuine when we submit offers. I get between 10-15 potential deals sent to my email every week and it’s just a matter of scanning through them for the next best deal.

We also buy properties through MLS. However, lately we have found quite a bit of competition on that system and have tried to stay away from bidding wars as someone will always end up overpaying.

Are there any other ways you find your deals?
We also have access to a local finance company’s online system that examines the demographics, crime, vacancy and employment rates of an area.

We like to purchase property in areas that have scored well in their system so that it is more likely they will fund the loans. This also allows us to offer these properties with finance options to potential buyers.

Outside before and after

What research do you do to narrow down a particular property?
We stay away from anything with signs of previous or current foundation issues and tend to start with B or C class areas because these properties are often undervalued. This also helps build in a buffer, in case a major mistake is made because the property didn’t cost a fortune or set us too far back when trying to recover any losses.

What key factors do you look for when deciding to purchase a property?
We tend to look at key features about a properties’ surroundings, such as its proximity to good schools, highways and the employment rate in the area.

Additionally, we always have the buyer in mind when purchasing a property. Most of our buyers are investors so we want to make sure that the tenants in the particular areas we buy have steady incomes and can afford to pay the rent with ease.

We also want the area to be half owner occupied and half tenanted. This gives our purchaser an exit strategy to one day offload the property to an owner occupier. An owner occupier is always willing to pay more than an investor for a property as their decisions tend to be more emotion based instead of being about the numbers like most investors.

What are the most common rehabs you make when flipping a property?
We never buy a house with previous or current signs of structural damage and prefer that the roofs have at least a 10 year life span left. Most of the properties we buy need a complete overhaul.

We also make sure to eliminate any potential maintenance issues that might occur in the years to come once the property is tenanted and rehabbed such as plumbing and electrical issues.

How long does it typically take for you to complete a flip?
It normally takes around 4 weeks for our team to complete a flip and we typically have 3 projects going at once.

You shouldn’t focus on making a quick dollar as a dollar quickly made is a dollar quickly lost.

What are some ways you sell the property once you have completed the rehab?
We focus on quality over quantity when selling a property. Currently, we are working on establishing relationships with individuals and groups worldwide to assist with the marketing and sales of our properties.

Do you have some unique tips to move properties quickly?
The best tip is to always have the end buyer’s interest at heart. You should deliver a great product at a reasonable price, offer fantastic after-sale service and assist the investor throughout the lifetime of the investment – which will set you apart from other companies.

Also, you shouldn’t focus on making a quick dollar as a dollar quickly made is a dollar quickly lost.

What are some types of properties investors should avoid trying to flip?
I strongly suggest beginner investors who are looking to flip avoid any property that needs a major rehab. You should begin with properties that need minor fixes like a cosmetic rehab. This is a great way to learn about flipping while building your experience.

What are some aspects of a property you recommend flippers always rehab?
You should always re-wire and re-plumb every house. Most of our buyers buy more than one house from us, so we always do this to ensure they are getting a good product and service every time. It’s much easier to do the work upfront and keep the investor happy then to not do the work and go looking for a new investor.

Not sure what house flipping is? Read our article 4 essential house flipping rules for beginners to learn more!

Page 1 of 212