Earlier this year I sold my 200th house flip. These are not wholesale deals that I never technically buy or fix up, these are house flips that we buy, renovate and sell. It has been by no means easy to do this many flips and I have had my fair share of problems along the way. However, I love real estate, particularly house flipping and that is a big reason why I think I have been so successful and been able to flip so many houses. I did not flip 200 houses overnight, it took many years. I also had a lot of help along the way and did not do it all overnight! It also took many years to build up to a point where we were doing 20 to 30 flips a year! How did I start flipping houses?
I suppose some would say I was lucky to get into the real estate business. I did not plan to be in real estate or have a burning desire to flip houses. I went o the University of Colorado in Boulder where I got a degree in business with an emphasis in finance. After college, I decided to help my dad while I figured out what I wanted to do with my life. I could not find the perfect finance job that would pay me millions of dollars to run a company right out of college for some reason.
My father had been a real estate agent for many years when I started working for him. I used to sleep under his desk in the office when I was a kid and I was around real estate all of my life. I loved houses and when I was a kid and even used to draw floorplans of houses I wanted to build someday. However, when I got older I lost or at least lost track of that love for houses. I did not want anything to do with real estate, maybe because I wanted to make my own path.
When I worked for my dad I was doing manual labor for $10 an hour. I was working on landscaping, painting houses, taking care of their properties, and any other task they could find for me. I saw my friends in the corporate world working like dogs and getting almost nothing for it hoping they could move up the ladder. I saw my life which was much different and had much less stress. I decided to pursue real estate a little more.
My dad was a real estate agent but he also flipped houses occasionally. I decided to help him a little more and I got my real estate license. I liked being an agent but I loved flipping houses with my dad. I loved the process of finding a great deal, fixing it up, and confirming that you know what you are doing by selling for a profit.
One of the main things I did, even when I had my license and was selling houses, was helping with the house flips. I convinced my dad to make me a partner and pay me a small percentage of the profits. I was not making much money, but I was a big part of the business. I remember the first house we did together.
It was a complicated deal we had to buy from the public trustee auction. We were able to buy half of the house through the husband but the wife had disappeared. Because we had half of the deed we could wait for the foreclosure process to end and we could redeem that half to get the whole house. I did a lot of research to make sure that what we thought would happen would actually happen.
Everything worked out okay, we bought the house, we fixed it up, and we sold it. After going through the process I was hooked. My dad had some contractors he had used for years who could do almost everything and he bought almost everything from the public trustee auction.
I was lucky to work with my dad because he knew what he was doing and was able to teach me. I did not make a lot of money as I think I started out as a 10% partner or something and I was doing a lot of work. Right away I took over managing the repairs, the designs and finding deals as he was more focused on selling houses as an agent rather than flipping them.
The biggest advantage I had was that my dad was paying for the houses using local bank’s lines of credit. This was in the early 2000s when it was much easier to get loans and lines of credit before the housing crash. My dad also paid for the repairs on the houses so I did not have to bring any money into the deals. This was a huge advantage and we both realized how lucky we were after the housing crash when lending got much tighter!
My dad did not do any of the work on the houses himself. He is not what many would consider handy and I am not sure if he ever did any of the work at all. He always hired it out and stuck to what he was best at. This was a great lesson and what I reinforced on myself when I tried to fix up a house all on my own later on. Another advantage I had was the teaching of having others do the work that you are not good at or do not have time for. We also had good contractors to work on the houses from the time I started working with my dad.
While I had many advantages getting started flipping houses I was not just along for the ride. I made some huge contributions and big changes to our business. My dad flipped a few houses a year at the most. He also did not spend much time remodeling them to modern standards or look for new ways to find deals. My sister had worked for him for a short time as well as his assistant before I joined the team. In both cases, they were not able to do much with the flipping business, and not much changed.
When I came into the business, I changed the paint colors, the design choices, the amount of work done as far as designing the houses. I also found new ways to get deals like auctions and the MLS. I took on different types of projects than my dad would do, and I even found us more money to use! There were family members perfectly willing to loan us money to do more flips and all we had to do was ask.
As we grew the business I slowly got a bigger and bigger percentage of the profits, but never got close to 50%. My dad was not one to give me money just because I was family and I don’t blame him for that at all. We went from doing a couple of house flips a year to 8 a year. After I took over the business, I got up to 26 house flips in one year a couple of times!
While I had a unique situation and advantages many of you are wondering how can this relate to me who does not have these connections or advantages. That is a good question and I cannot change the advantages I had or the advantages you may or may not have. I can give some suggestions and ideas on how to get started.
If you have the money you can start flipping on your own but make sure you are well educated on the ins and outs of house flipping. I wrote a book on flipping houses if you want to know it all and I have videos of all of my flips on my YouTube channel as well. You can see one of our latest videos below:
If you do not have money to start flipping houses, which most people do not, there are still ways to get started even if your dad is not around to teach you the ropes.
The first option when you do not have much money is the easiest option and an option many people take advantage of without even knowing it. Buy a house to live in.
I know many gurus are out there telling people that a house you live in is a liability and a bad investment. I disagree completely and a house to live in affords people with little money a ton of opportunities. The amazing thing about buying a house to live in is you can buy with very little money down. That means that you can put 5%, 3.5%, 3%, or ever $0 down when buying a house to live in as opposed to 10 or 20% when buying an investment property. If you live in the property as an owner occupant for 2 years the profit will most likely be tax-free as well!
It can be tough finding houses that need some work, but not too much, as many owner-occupant loans require the houses being bought are in livable condition. It is possible and there are even loans like the FHA 203k loan that allows a homeowner to buy a house that needs a lot of repairs!
The articles below go into more details on how to actually do this:
The article on how to flip houses with no money also talks about using partners to flip houses and that is what I did with my dad. While it helped that my dad flipped houses I know many people who also get started by partnering with other flippers or people who had money. One person provided the money and the other did all the work while they split the profits 50/50. It takes more time and effort to find a partner, but they are out there!
I have a lot of people who want to be my mentor and learn from me while working with me. Here is the number one rule when asking a mentor for help:
Do not offer free work but have no idea what your skills are or what you can help with.
Successful people usually do not have time to find or create jobs for random people. If someone wants to work with me or for me that is fine if they want to work for free but I would much rather pay someone who will help me solve problems and make my business better. Free labor when I have to figure out what that labor can do or train that labor is not a big advantage to me.
If you want to work with a flipper, figure out how you can help them? What skill do you have to make their life easier or make them more money? Can you work on houses? Can you do accounting? Can you build a website? Can you get them more deals? What can you do? If you cannot do anything you better learn some skills ASAP!
Being motivated and working for free is not a skill. In my experience, most free labor is not good labor either and there is nothing stopping someone from quitting as soon as they get bored or distracted. I am not actively looking for people to help me flip houses but we do take on new contractors or people who can help with other tasks.
Flipping houses has been a ton of fun and made me a lot of money over the years, but it was not easy to build the business. I was lucky that I was able to start working with my dad to get into the business but I thrived when I took over and was able to create my own business. Often, flipping that first house is the toughest obstacle to overcome. Once you can get that first flip under your belt it all gets much easier.
If you want to learn more, be sure to get my house flipping book on Amazon!