Flippin' isn't easy! (Long post) - Posted by Bill Scott

Posted by JohnBoy on October 30, 2000 at 08:25:53:

Usually the deals to be had for a low price don’t come from finding them listed at a low price, they come from offering a low price where the seller says YES. Can’t count how many times where these deals that were listed with a realtor said, “Gee, if knew they would have taken that, I would have bought the place myself!”:wink:

Flippin’ isn’t easy! (Long post) - Posted by Bill Scott

Posted by Bill Scott on October 29, 2000 at 08:12:24:

I’ve been seeing a lot of newbies who want to get into the business of flipping houses—usually because it looks like the fastest way to make some money. Well, it can be, but like anything else it’s going to take some real work. I’m putting this post out there as a ‘wake up’ to those who want to try this. Let me tell you a little about this last week…

The first problem with a flip is that you have to find the right property. I’m a realtor with five years experience and I belong to a local REIA. This means I can find low priced houses fairly easy–but then the surprises start.

One of the first properties I looked at was a building with a long ‘nose’ next to a busy state highway. The price was right—$9900, and I was thinking ‘what’s wrong? why hasn’t this sold?’. Well, it turns out this ‘nose’ has been bashed in by drunks in cars several times. In fact, it’s still bashed in from the last time. This property also used to be a gas station, and the tanks are still underground and they date from the 1930’s. They are also located next to a storm drain that empties into a creek. It costs about $7500 to remove these tanks IF they are intact. I decided I’d pass on this one! But, it goes to show that you really have to know the background of a property or you can get burned bad!

Another property I looked at was a new repo that had just come in. I know the broker and this property hadn’t even been advertised yet. It could be a duplex, he said, and the bank was willing to short sale for $13,000. Guess where it was? In the middle of a war zone! Several vacant houses in the area with the windows busted out, liquor bottles busted on the front porch, a guy dealing drugs on the corner. The problem with neighborhoods like this is that as fast as you repair the place, the vandals tear it apart. Nice price, but no thanks!

A third possiblity was a property with two houses on it. I drove over to look at it. The property is in a neighborhood of homeowners with a strong neigborhood watch program. Looks good so far right? Well, the houses were cement block and the insides needed some work. To fix up the houses at the price asked was doable–even with a flip to an investor. However, the neighborhood had a problem. This was a black neighborhood and most of these homes had been built by the blacks and then passed on to their sons and daughters. That’s how these folks became homeowners–and is a big flashing ‘STOP’ sign. I’m not racist, but I am a realist and in my area you just can’t find intact, black families with credit, who want to buy in an all black neighborhood. It’s very, very difficult to sell these properties. So…three good possiblities but none of them panned out.

What does this mean? Well, you have to find properties for about 60% of market value if you are going to flip them. You also have to find them in neighborhoods that aren’t war zones (or other problems) so that investors will buy them. You also have to look real hard at the properties background–if it looks like such a great deal, why hasn’t someone else snapped this up?

Then, after you find the perfect property, you have to advertise the heck out of it and find an investor and close on the property. I belong to the Cincinnati REIA and the estimate is that there are only about ten folks doing flips for a business in this area of about 1.5 million. Why? It isn’t easy!!!

Who ever said it was “easy” ? - Posted by William Bronchick

Posted by William Bronchick on October 30, 2000 at 12:58:09:

Flipping is SIMPLE, but not easy. It doesn’t take a lot of brains, but it DOES take effort. 99 out of 100 deals are flops. 99 out of 100 sellers are unmotivated. Coincindentally, 99 people (or so) out of 100 retire broke.

Re: Flippin’ isn’t easy! (Long post) - Posted by Todd in Ohio

Posted by Todd in Ohio on October 30, 2000 at 08:16:49:

Bill Scott:

In reply to the following scenario you gave…

However, the neighborhood had a problem. This was a black
neighborhood and most of these homes had been built by the blacks and then passed on to their sons and daughters. That’s how these folks
became homeowners–and is a big flashing ‘STOP’ sign. I’m not racist, but I am a realist and in my area you just can’t find intact, black
families with credit, who want to buy in an all black neighborhood. It’s very, very difficult to sell these properties.

I don’t know if you’re a racist or not, but the above scenario could have been given WITHOUT any mention to race. The problem you have identified from an investment perspective is that homes are passed down within families, and therefore this niche market is not attractive to A-1 buyers who can qualify to live elsewhere.

We all have biases on things (yes, including me, let’s keep it real), so sometimes it takes a little more effort on everyone’s part to be colorblind.

Happy Investing!

Re: Flippin’ isn’t easy! (Long post) - Posted by David Alexander

Posted by David Alexander on October 29, 2000 at 19:27:30:

Let’s explore it a little further… I think if you repositioned your marketing where folks were calling you you could figure the numbers out and it wouldnt be so hard to find properties. I dont look for properties but instead work on trying to get folks motivated to sell to call me. I also buy alot of properties from other investors. I’m also believe your only focusing on one kind of Investor to buy your deals. The rehabbers, and long term rental guys. What about guys like me? Most of what I buy is bought in the manner of subject to the first. So I simply have folks finding deals gettting them under contract and flipping the deal to me. I get these deals in good neighborhoods at about 70-80 cents on the dollar.

David Alexander

p.s. My intent was not to flame you, but jar you a little. If ya knew me you’d understand.

So why limit youself to flipping? - Posted by Bill Gatten

Posted by Bill Gatten on October 29, 2000 at 18:38:24:

Remember Henny Yougman’s advice: If it hurts when you go like that…don’t go like that!

See my post above on this subject.


Re: Flippin’ isn’t easy! (Long post) - Posted by SCOTTNOVI,MI

Posted by SCOTTNOVI,MI on October 29, 2000 at 15:49:32:


I agree with you that flipping is not easy, it is my experience in the Detroit area that you have to be very careful what you purchase or you may open up a whole new can of worms. I don’t think anyone should become a full time flipper right away. I work my day job and mind my business. I’m 28 and have did 24 flips this year. Sounds great right? but I looked at well over 1,000 properties. It’s all perseverance and I would tell anyone that if they are serious.

Is your glass half empty or half full? - Posted by J.P. Vaughan

Posted by J.P. Vaughan on October 29, 2000 at 15:35:32:

It’s a matter of mindset, Bill. Flipping isn’t "easy"
but it certainly isn’t “difficult,” either. It’s a great
way for beginners to get started.

As Henry Ford said, “Whether you believe you CAN do
something, or you believe you CANNOT, you are always


It’s a lot easier than you think - Posted by ToniCoxNJ

Posted by ToniCoxNJ on October 29, 2000 at 15:21:02:

Dear Realtor and member of REIA, it’s attitude like yours that keeps you from making deals. I’m not a professional realtor like you, in fact I’m fairly new to creative real estate, but because I had the RIGHT attitude I went out and secured a property with only $400. With very little money, a little knowledge and a LOT OF ENTHUSIASM,I took over this property in an ALL BLACK neighborhood, near a war zone! When I sold it 3 months later, I paid out $89,000 out of my sale price of $135,000! Needless to say, I got even more excited and quick-flipped another large house in an all white neighborhood this time. I sold it for $180,000 the house is worth $225,000, I paid out $130,000 at closing!! Every neighborhood has it’s own set of buyers. The question is what is your plan, your backend (quick flip, lease-option, hold and rent). It wasn’t hard for me to quick-flip these properties all, but it does take a little knowledge.

So, either you get in or you get out, but don’t spread your bad attitude to others who might be new and trying to make a better life for themselves through flipping. It has changed my life and if I had listened to people like you, I would’ve never known… I won’t let anyone steal my dreams. If you want to stand by and criticize - all the better, there’ll be more properties for people like me.

Hope this wakes you up!

It’s not that hard either! - Posted by Mark-NC

Posted by Mark-NC on October 29, 2000 at 14:56:30:

It’s like David said, You have talked yourself right out of these deals. You would be surprised. The buyers are out there. If you can get them a good price or terms you will sell them and that includes any property in any neighborhood.

What you will find out is, eventually each of these properties will be sold. So if you can buy them cheap enough you can sell them yourself and make the quick flip money.

For instance I have a guy in my area that gobbles up these war zone homes. He is so busy with them that he doesn’t have time to look for them, thats where I come in. He will take as many of them as I can find as long as his after repaired value is no more than 50 to 65 %.

He fixes them up and rents them section 8. He has 40 of them now and each one cash flows between 250 to 350 each. Now I personally wouldn’t care to do this but someone else does. You just have to find that someone else.

As far as finding properties in a hot market, they are there, you just have to look beyond the numbers and make offers . I live in one of the hotest markets in the country. I have 2 deals I am flipping next week. One of them, I had 4 investors look at it and they said they wouldn’t touch it with a ten foot pole so then I changed my ad and decided to offer 100% financing including repair costs on it using my hard money source to fund it, it was gone as soon as it hit the paper. I found a couple more that I am ready to make offers on this week.

As far as your local REIA is concerned they may not know the whole story. If it’s anything like the one I go to most of them are into rentals and anytime a flip deal is presented nobody in the organization wants it because they are wondering why you don’t want it. But I don’t have any problems finding other buyers outside the organization.

Anyway, good luck and look at all the angles before you give up, I hope it works out for you.


Your Not going to like this… - Posted by David Alexander

Posted by David Alexander on October 29, 2000 at 13:19:19:

So dont read it if your faint of heart. This is intended to be constructive not destructive.

Sounds to me like you already know all the answers and that’s why you cant find any properties to flip. There are people who buy in just about any area … if the price is right. For instance why not the home in the qoute “Black neighborhood” Couldnt you flip to an Investor who buys, fixs and owner finances… I myself rarely make folks go out and get a new loan. Your thinking inside a box and that deals are only done one way. Maybe one of those families have relatives that would love to move their.

You’ve looked at three properties and talked yourself out of all of them. You should be looking at (or having someone look at for you after you’ve made the offers to weed out the motivated from the non motivated) 3 properties a day and cherry pick the deals.

There are only 10 Investors to flip to… I find that hard to believe. People are probably doing deals all around you.

Or another thought find the buyers and flip directly retail.

I once went to buy a house and then got the house under contract , and as I was leaving saw a realtor standing outside of the house next door. As she was leaving I asked her what houses go for in the area, and she informed me the one she just came from just sold for 90k. I asked her if she knew the area? she said she worked that particular area quite a bit. I then asked what she thought the house next door would sell for, to which she answered 75k or so(was an older property). I then told her I was Investor looking for property in the area and if she came across any deals I would be happy to talk to her about. She said in this market an Investor couldnt survive because an Investor might only make 5k or a house if they could even find any deals. I didnt bother telling her about the house next door.

I had the property next door under contract for 28k, it needed 12k worth of work and I could sell for 75k. I had knew I could at least get 68-70 and she told me 75…

Anyway just pointing out that when you’ve decided that you know it all it is at that point when your brain shuts down and you quit learning. Decide to learn new ways and new information and the possibilities will become endless.

Another thought is that you need to start hanging out with more investors because then and only then will you think like they do. If you hang out with realtors you’ll end up with their mentality… which is fine if you want to be a realtor and make 3% on houses, and if I was going to do that I would hang out with the ones that market and sell 10 million a year or more in houses.

David Alexander

Re: Flippin’ isn’t easy! (Long post) - Posted by tarheelt

Posted by tarheelt on October 29, 2000 at 12:29:51:

Good post. You are right it isnt easy. But any of these three deals might have resulted in a flip for you, as you never know what someone else will see in a property until you market it. I am hoping to double close on a little bungalow in a war zone this week; the problem with it is that an aerial photo shows the property line running right on the side of the property. My buyer knows all this but doesnt care due to his title insurance covering a possible encroachment. I am keeping my fingers crossed that it works out. Tarheel T

Re: Flippin’ isn’t easy! (Not like this it ain’t) - Posted by Jim LaVerdi (Phx_Az)

Posted by Jim LaVerdi (Phx_Az) on October 29, 2000 at 12:27:12:

Sure it’s not easy in the areas you described! It’s more than likely Impossible! So my question is Why are you looking in those areas? We don’t want to buy properties in “War Zones” because like you said in your post. “The problem with neighborhoods like this is that as fast as you repair the place, the vandals tear it apart.” Further more, people that can qualify for bank loans don’t want to live in those areas, so why bother? Look in areas just outside the war zones. There are plenty of houses in those areas as well and lots of good deals too!

Instead of advertising the heck out of those properties to find an investor, may I suggest that you check with those “Ten Folks” you mentioned to be guys doing flips for a business and talk with them in regards as to what areas they are interested in, and what price range are they looking for. If you find these properties, can they close quickly etc. After you pre-screen these fellas you’ll then have a good idea as to who’s for real and who’s not. It’s always nice to have that buyers list so when you get these properties tied up you know who to call, and knowing the ones your calling are for real makes this business a whole lot easier for us all.

Hope this helps

Jim LaVerdi (Phx_Az)

Re: Who ever said it was “easy” ? - Posted by Bill Scott

Posted by Bill Scott on October 31, 2000 at 04:01:43:

I agree Bill, and thanks for the post. I just didn’t see this being said for any of the newcomers out there and I wanted to tug on the reins a little to bring them back to a slower pace. Try it! Do it! But don’t quit the day job and don’t say investing doesn’t work if you look at 100 houses and haven’t found a deal yet. That’s the way the business goes!

And 99% of all statistics are made up - Posted by Bill Gatten

Posted by Bill Gatten on October 30, 2000 at 20:02:04:

Got that statistic from Bill Bronchik’s recent workship in L.A.

Hate to say it Bill, but I’ve used that line in every seminar I’ve done since…and people think I’m so clever for saying it. No…just kidding…I always give you credit for it (what’s the statue of limiations on that, anyway?).


As a newbie who is also BLACK… - Posted by George(OH)

Posted by George(OH) on October 30, 2000 at 09:09:37:

thanks for your post, Todd!

You, Bill, kinda showed your true colors (pun intended) with your original post.

You say that in your area you can’t find black, intact families with credit who want to buy in an all black neighborhood.

This implies that you have not considered that someone who is white, asian, hispanic, etc. would not be interested in the property. I may not want to live in a crappy neighborhood with a bad element, poor schools, etc., regardless of the racial makeup. But if the numbers work, I, or other investors may want to purchase it as an investment property. Have you given this any thought? Or did you ASSume that ONLY blacks would buy in that area?

This sounds like prejudice, which I believe loosely means to “pre-judge”.

I don’t have any experience as a realtor, but it doesn’t seem that having that type of mentality could be beneficial in your profession.

Now, you may not have anything against blacks or any other race, and if my criticism is unfounded, by all means, I apologize. But, as Todd so eloquently stated, race/color could have been left out of your post altogether, or at least not used in that context.

God Bless,


Re: Flippin’ isn’t easy! (Long post) - Posted by Bill Scott

Posted by Bill Scott on October 30, 2000 at 04:12:58:

I liked Bill Gattens list (see above) of ways to find a house. No, I don’t have just one way—but going out and looking is one way that I like. Do you remember that first dog of a property that I described that kept getting bashed in by cars? Well, while I was looking at that a nosy landlord stopped by to see what I was doing.

I got to talking with this guy and just down the road he had a four unit/all brick with a big, seperate garage that could be another unit on the top floor. The lot is big enough for another two unit building as well. Turns out he wants $150K for it and the broker I work for just sold a bunch of duplexes for an investor who is looking to buy more, larger units. My credit lines are tapped out right now, so I’m working on selling these for a pretty decent commission. Anyway, it goes to show that sometimes the best way to find properties is to go out there and look!

Re: Flippin’ isn’t easy! (Long post) - Posted by Bill Scott

Posted by Bill Scott on October 30, 2000 at 04:05:18:

You’re right–it does take perseverence and looking at a LOT of properties. Thanks for posting a ‘real world’ post–I was beginning to think I was all alone out here on this tree limb! :slight_smile: I also agree that you shouldn’t give up your day job to jump into flippin properties–but I know folks who have done that and wound up losing money. They also become quite convinced that real estate investing doesn’t work—but it does IF you take it slowwww at first and figure out what you’re doing! Thanks for your post!

Re: Is your glass half empty or half full? - Posted by Bill Scott

Posted by Bill Scott on October 29, 2000 at 15:40:09:

The actual assignment or double closing isn’t all that hard to do—but finding these properties can take time. That’s what the point of the post was all about. I’ve seen too many newbies who seem to have the idea that these deals are a dime a dozen—they aren’t. You have to look hard, and look carefully and know what you can sell. If you don’t do this, you can get burned!

Re: It’s not that hard either! - Posted by AnnNC

Posted by AnnNC on October 30, 2000 at 15:51:55:

Mark- what DID that ad say? The one for 100% financing and also financing repair costs? Details?
Also, which REIA did you go to? just curious.