Flipping Houses Question

crazyjayc

Hello, I'm in high school but looking to make a career out of flipping houses. I'd probably start out working for someone else and get into managing myself after lots of experience and hard work.
But!!! Before I do this, I must know what I need to study in college to become a house flipper. What courses I need to be in and maybe what I should be majoring.
Thanks for checking this thread out and hope for some good comments about the path I want to take after high school. I know its a risky business to say the least.
Thanks for reading!

mdshunk

Now is not the time to flip houses, but it is a good time for something similar....

It's a buyer's market. Buy as many as you can, do as little as you can to them right now, and rent them out. In simple terms, become a slumlord for a little while. That will at least pay the mortgage.

Flip them only when the market turns.

As far as education goes, take real estate courses. You don't need much actual tradecraft knowledge to flip houses. I know I'm gonna take some heat for that, but I believe it's true. Craftsmen make terrible flippers, because they're too concerned with making it "right" and less concerned with making bigger profits.

woodworkbykirk

if i were u id either get some experience in renovations first so you'll know just exactly what goes on with things in regards to running into problems in renos and problem solving and see how this can affect both deadlines and budgets, from there consider getting into flips and see how it goes. get aquainted with some realtors as well so they can help advise on local and what to focus on with the house

i worked on one flip house, was purchased for $240 k, the plan was to sell it for just under 500, builder decided to completely dress it up, so the budget was doa, beautiful house everyone who has been through it jaws dropped at the detail that went into the house compared to everything in the area, needless to say the builder ended up losing money

the flippers who are making money at it that i know of are ripping off the people who buy the place, the flipper will buy a place for say 180k, install 2 or 3 windows, lay some laminate , tile the kitchen and some fresh paint and mark it up to $225k, and they dont even address what needs to be fixed such as roofing, electrical upgrades,

also i'd stop watching tlc and A&E, to many of these shows are giving people ideas to do things they shouldnt get involved in.

crazyjayc

Ok, I'm understanding this in a way. What about Arch. Design? I'm Taking Arch. CAD in school now and it seams as if it will help me flip a house as I might add some new windows like you said, or knock down some walls..

neolitic

Since you are in high school,
you should have been able to
read the terms of service, to
which you agreed.

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mdshunk

Screw design, and get this straight...

Flipping is not about designing crap like they'll teach you in an architectural major. It's about putting lipstick on a pig in the most cost effective way possible. It's business, and that business is turd polishing. Learn business.

crazyjayc

Well technically I'v finished High school, Already past the first semester and have been accepted to the university of my choice. But Sorry I was not aware of this rule stated in the 'Terms and Services'.

As for the feed back; I'm getting some great advice, thanks a bunch! Still I would like to read back on all your comments and get a better idea and understanding of what I need to do in order to have the most successful career in Flipping Houses or something similar in that direction/ path.

Mike Finley

Hang around big talking liars and conmen. Get used to searching out the lowest bidders for doing the remodeling work, get used to doing everything illegally, no permits, no licenses, no insurance, get used to continually redefining 'good enough' for what it takes to rehab something. Get used to covering up problems and passing them on to the unsuspecting buyers of your project. Get used to hounding the sh*t out of people in foreclosure, walking the fine line between truth and fiction in regard to what you are going to do to get your hands on their house.

It's not a pretty picture, but TV and the get rich books all have different motives then we do. The books and seminars are designed to part as many people with their money as possible to make the seller of them rich selling books and seminars instead of actually doing what they are trying to tell you to do to get rich. The Tv shows are designed to be interesting and get people to watch, not necessarily be a documentary.

Now, yes there are some people doing this on the up and up but I'll tell you, I personally know at least a hundred of these people in one degree or another and 99 of them have some of the traits I outlined in the first paragraph.

Flipping houses has rarely ever been about a legitimate business. It's always been about skirting the shadows to make money.

AskForTheSale

Every house flipper wants to be the next Tom Voo sitting on his yacht preaching how easy it is on late night TV with sexy girls in bikinis at his side and asking you to come to his FREE seminar to learn how you too can become a wealthy real estate developer, broker, expert, doctor, etc., etc., etc

Remodel Bud

That is the truth. Rarely, has it ever been a legit business.

Aggie67

The pros here can correct me, but didn't the whole business case for flips go out the window about 1-2 years ago? Once property values in a neighborhood drop like they have recently, it gets incrementally less profitable to attempt it. The cost of putting the labor and material into a flip hasn't changed, but the sell price of the property itself has gone down. Even if you buy it depressed by 15% (relative to 2 yrs ago), you're going to sell it depressed (if at all) by 15%, yet still put in the same coin into upgrades. The profit goes down.

Example:

2 years ago:
Buy for $120k
Invest $60k
Sell $200k-ish
Profit $20k-ish

Now:
Buy for $102k (15% lower than 2 yrs ago)
Invest $60k
Sell for $170k-ish (15% lower than 2 yrs ago)
Profit $8k-ish

It's no longer as attractive to flip as it once was, because the cost of the labor and material hasn't gone down. In fact it's probably gone up a little.

I read somewhere that Rockefeller or some big wig stock guru once said that the day he overheard his doorman talk about buying stock in XYZ, that Rockefeller knew it was the time to sell his shares in XYZ.

The modern equivalent to that is this: once it becomes a TV show, the time to get in on it has passed.

I recommend you follow the landlording advice. There will be millions of Americans looking to rent in the next decade. Buy a fixer upper duplex and rent half of it out. Fix that up while you're living there. Then move out and up the rent.

Mike Finley

Good advice aggie. I'd only say that the business didn't change, only the cover up became more exposed, the media finally stopped running stories in the local newspaper about how John Smith is making money doing flips to how John Smith and 100 others are now on the foreclosure lists they used to buy!

AskForTheSale

They work off a higher gross profit percentage than only 10% before the market tanked.

When you risk your money on purchasing real estate that needs improvement, if you can not clear minimum 25%, it is not worth risking your money.

Ex:

Home VAR (value after repairs) on open market: 100K

Purchase price would be (100K X .65) – cost to repair and 3-6 months carrying interest on construction loan until sold.

Cost to repair: 25K

Realtor and construction loan carrying costs 10%

Purchase price: 30K

35% Gross working profit.

crazyjayc

I find this very interesting; Although true in most cases, I have a true desire and interest in becoming what I want to be. Money has a very small roll/part in my life's act .

As for all of you that have posted a comment in this thread; I have not yet to find each and every comment/post very interesting and right down to the point. I'd love to keep on reading and evaluating each and every one of them. Thanks again! This is truly a great forum.

bert0168

I don't get it. These replies have given you exactly what you should be looking for in terms of advice.

Perhaps you may better find what you are looking for by following Tom Voo and buying his crap and reading up while watching flip this house. Should find everything you need there.

genecarp

Flipping houses does not have to be the shady, unethical business that has been described here, there are some of us who take pride in the homes we deliver, we often take the worst house house on the block, and service the entire neighborhood by beautifying it. of coarse there is often profit involved, as there should be. regarding the current housing market, this is an excellent time to buy in, the housing market like the stock market can not be timed, your in or your out....to buy low and sell low, is the same as buy high and selling high, just less cash out of pocket...G

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Vince_B

crazyjayc,
My advice is to not think of college as a trade school.

You may decide to flip houses or you may not, but you're not going to learn how in college.

Go to college to become a well rounded educated person. Major in something that interests you. It's not as hard to make money as it is to have a life that doesn't suck.

Grumpyplumber

Going to college for the specific intent of becoming a house flipper is the equivalence to taking college courses to run a hot dog stand.

If I were your age again, knowing what I know now, I'd focus on an engineering degree, IT or business degree.

I believe the term "flipper" will be a thing of the past, I have already seen more scrutiny from local building departments over homes that are purchased for the speciific intention of flipping.

The door was wide open for far too many individuals to simply buy a home, claim they live there and improve upon it by pulling permits as the "homeowner".

New homeowners then encounter atrocious wiring, plumbing and structural inadequacies that are covered up with a nice layer of paint & tile.

Nathan

If your in HS and not a professional contractor this site really isn't for you. This also isn't a house flipping site. House flippers are not contractors.

Thanks.

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

AtlanticWBConst

Well Said.

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