Flipping

TreeEater
TreeEater

Let's talk about flipping
What do you flip?
Where do you flip?
Any tips releated to flipping?

I used to flip used phones that I bought from Craigslist on swappa,made around 1k$ per month,but now I'm looking for a new niche.

Nude_Bikergirl
Nude_Bikergirl

basketball shoes

Crazy_Nice
Crazy_Nice

@TreeEater
I do guns on armslist, find people "giving" shit away and make 50 or 100 bucks

Sir_Gallonhead
Sir_Gallonhead

@TreeEater
I cook crystal meth and sell it to minors.

SomethingNew
SomethingNew

I flip BMW car parts,

Buy a whole car for cheap, strip it of all useful/valuable parts then sell them to people on Facebook bmw enthusiast pages

Can turn a 300 dollar car into 2k

Burnblaze
Burnblaze

Cars

started with friends and family members giving away their old shitboxes. Instead of scrapping them I'd buy them for scrap value, fix them up a bit and then sell them

Firespawn
Firespawn

@SomethingNew
Yeah that's a profit of 1700 but how much time do you spend on each car

LuckyDusty
LuckyDusty

@Firespawn
I do this in my spare time as extra cash.

About a weekend to strip the car and then about 2 hours to create an excel spreadsheet of the parts. Then I'll post the spreadsheet up on multiple fb pages and let people contact me. Or if I'm browsing the pages and I see people who are after some parts that I have ill send them a pm

Evil_kitten
Evil_kitten

Books

garage sales, library sales, estate sales. small scale but getting something for 25 cents and selling it for 3 bucks is still a profit

Nude_Bikergirl
Nude_Bikergirl

@TreeEater
I flipped foreclosures and FSBOs up until the past few months. Markets drying up and the margins aren't worth the legwork these days. Bunch of rats doing it because it's 'easy money', giving people who actually put any quality into our work a bad name. I slapped 5 year guarantees on all of my houses, and nobody else within 80 miles of me does. It's all just paint over water damage and try to screw people. Mostly sold to commercial companies, and rented a few out myself. They loved me because I'd always have the paperwork and inspections in order, so my hold times were weeks, sometimes even days, while most of the cheap asses sit on shitty barely habitable dumps for 6+ months. I'd not even bother putting half my houses on MLS. I'd just call some companies and they'd send an agent out to inspect it on an agreed upon day. We'd have some simple open house with basic food, and most of the time one of them would write me a check that day. Might find some decent houses to flip soon, but I'm moving back to accounting for now.

Oh well. High volatility is something you need to be prepared for when flipping. Sometimes you just have to eat a couple losses in a row, and then deal with a dry spell on top of it. Plan your finances accordingly. This is why people get fucked up when flipping, or just sales in general. They get entrenched in a market, and become desensitized to change in that market. Don't be on the ship when it goes down. It's better to cut your profits a little short and have free time, than it is to just spiral down the drain.

Favorite part of it was flipping trash in the houses. Most of them contained 100% garbage, but you find some real gems every now and then. Braille copies of playboy for example. I can share more if people want.

viagrandad
viagrandad

@Nude_Bikergirl
Yes please do. I am planing to do the same in germany, I have a friend who basically flips houses that went on auction for a living. What advice can you give?

FastChef
FastChef

@viagrandad
My advice is knowing the market, and knowing what you want to do to sell a house to a specific type of customer. Most of my units were sold to rental companies, some of them for commercial, or mixed use.

To that end, I sold them with any and all necessary paperwork, inspections, and zoning in place. Once a house was sold they could change the locks, and move a tenant in that day, if they had one. Rental companies love that. Combining cutting out most of the closing costs, and being instantly in service, with a solid and reasonable warranty, it takes most of the risk and headache out for them. They can instantly start cash flowing on their investments. In short, I sold quality products to specific customers who were keenly aware of exactly what quality is, and who were willing to pay for it.

If you have a good market, and a number of companies that are willing to pay for good products and services, you can make money legitimately and honestly. Once word gets out, people will come to you. I won't say most, but a sizeable portion of my flips turned into bid wars because I'm consistently known as someone who delivers quality. They trust me enough to pay more than they otherwise would.

BunnyJinx
BunnyJinx

@FastChef
The average homeowner doesn't know fuck all, so people with shitty practices can undercut me. To them, all that matters is the upfront cost. They don't want inspections. They don't care about codes. They want things to be polished and superficially perfect. 10 years from now the house they bought from a shitty flipper is going to be falling apart and need tons of money to rip out the shitty patch jobs and fix things properly. Even if the buyer learns about/from this, they won't like any flippers in the future. The shitty flippers don't care though because there's always a fresh supply of ignorant buyers. For me it's a waste of time to target general homeowners because they either are too ignorant to not trust other flippers, or slightly less ignorant, but still too ignorant to trust me.

You can prey on them, but I don't like it because there's so much more risk involved. You can end up sitting on things, and money sitting around is money that I can't use to turn a profit somewhere else, plus you have substantial holding costs from loans, taxes, and other things like utilities, HOA dues, and ongoing maintenance. Even just keeping the yard mowed costs money. You can sell specific types of high demand houses I guess. That's sort of what I did, but I didn't target general homeowners. Holding costs are your enemy. It's not just the expenses, it's the money you lose by not being able to move onto another project. If you have large cash reserves, it's less of an issue, but the counterargument is that you could be investing those large cash reserves too, or hiring someone to invest them in some portfolio for you.

Again, my advice is finding a niche and carving into it. Contacts matter if you want to move properties quickly and efficiently. It's better to turn 10 grand twice than 15 grand once.

Lord_Tryzalot
Lord_Tryzalot

@BunnyJinx
Best piece of garbage I found in a house was a car.

In a crate in the basement was a 68 sky blue stingray convertible with just under 4000 miles on it. Had to rip a hole in the side of the building to get it out. The house must have been built on top of the car after it was put in the basement. Needed a lot of work, and I spent way too much time and money finding a serious buyer, but I still turned a pretty penny.

Strangest collection of shit I found was probably a guy that had tried to turn his basement into a bomb shelter. He had all sorts of rusted tools, some improvised weapons, a really shitty suit of plate mail, and more bibles that I've ever seen before or since. We threw out 4+ tons of bibles. Full dumpster of nothing but bibles. Thousands of them. All of it slightly rotting and reeking of mildew.

PackManBrainlure
PackManBrainlure

@Lord_Tryzalot
Did you finance the projects yourself with cash/credit or take out a mortgage on these properties? Can you get more into the financial side of things?

Thanks, your knowledge is great. I'm in highend construction and remodels and looking to do flips in 5 years or so

Lunatick
Lunatick

@PackManBrainlure
It varies a lot. I mortgaged whenever possible. Helps to get a good relationship going with good brokers. Hard money lenders are useful, but they cost a lot. Only use them when you have no other options. Cash on hand goes a long way to forcing a sale, and it's useful for the petty expenses that always crop up. Being in construction you should be familiar with how frequently you need that one 12 foot 2x12 to get it done. It happens. Plan for it.

Seriously, shop around for good brokers. Get a strong relationship going with a few, and never stop putting some effort into looking for better ones. If any broker jerks you around, even once, drop them. The exact same thing applies to contractors. Give them reasons to trust you, but never put yourself in a position where they can screw you.

If a contractor fucks up a job, and doesn't offer to fix it, or if you catch a contractor trying to hide poor quality workmanship from you, shitcan them. Doesn't matter if you have them on multiple projects. I'll place several projects on hold instead of giving a guy a chance to steal/sabotage. Don't argue with them, just get rid of them. You don't need to explain why they are fired. They need to explain why they didn't do the job correctly, and they need to do it in front of a judge. Any time you fire a contractor on a big job, get several others to come in, inspect their work, and sign affidavits about exactly what happened. If the sacked guy gives you shit, just tell him he needs to communicate through your lawyer. If he owes you materials or money have your lawyer send a demand letter to him, and if he doesn't respond with payment in full, sue him.

Smart people will drop it once they realize they fucked up. Dumb people cannot be reasoned with. It's not worth your time to argue with them in either case. You do not have any obligation to be nice to, or play games with, someone jerking you around. They get 1 chance to fix it, and then you hire someone to go nuclear for you.

w8t4u
w8t4u

@Lunatick
Good stuff thanks. So by broker you mean real estate broker I assume?

So heres my tentative plan maybe you can tell me how viable it is:

save up down payment
mortgage though bank
get up to $40k Home Depot remodel line of credit
obviously have enough saved to pay 6 months of bills until house sells
do almost all the work my self (employing close family who are also experienced tradesmen)

How big of a down payment did you typically make?

Snarelure
Snarelure

@Evil_kitten
I do this occasionally. Every now and then, my library will leave a shelf full of free books. Most aren't worth anything. Any tips for quickly finding valuable books in heaps of junk books? I'm sure an ISBN reader helps.

SniperGod
SniperGod

@w8t4u
mortgage brokers. They let you buy a house, then pull the cash right back out and keep buying. Leverage is your friend. Real estate brokers can find you stuff, but lots of them seem to be geared towards general homeowners. Coming to them as a flipper is possible, you just need to find good ones.

Your plan is fine, though you really should consider finding quality material yards. Home Depot has substantial markups.

I try to buy a house with cash on hand, and then mortgage it. This lets you cut prices, and saves you so many headaches because you separate things into component parts. Being able to walk up to a seller after verifying a clean title and saying "we can close tomorrow and I can give you a certified check/bag of cash from the bank" REALLY lets you push things. Skittish sellers like cash in hand, and removing middlemen cuts down on costs. For actual improvement flipping, and not cosmetic polishing, you are typically looking to buy houses that are already in a bad state, that people want to get rid of. Very often they aren't expensive. Introducing realtors, mortgages, and other stuff can add weeks, sometimes months, to closing. As the saying goes, cash is king.

If you are doing the work yourself, you can get higher profit margins on a property, but you can't hit as many at once. I approach things from a more numerical/managerial perspective. I'm not above getting my hands dirty, so to speak, I just don't have time for it generally. Some of this is marketing. You can say, yes we are all certified, insured, bonded, etc tradesman, and we renovate houses. Sell yourself as professionals who value doing things right. It really means a lot to some buyers.

Getting a real estate license yourself is definitely a long term goal that you should keep in mind as well. That's just another middleman that you can cut out of the picture, to the tune of several percent. On a nicer property, that's easily 10 grand or more. Way more than it costs a year.

StonedTime
StonedTime

@SniperGod
Ok great info, thanks. I will look into the real estate license. Are there any websites or books you recommend for learning the ins and outs of this stuff? Ive spent the last 5 years building my trade knowledge and so far know almost nothing about the business side

Fried_Sushi
Fried_Sushi

@StonedTime
Don't really have any books to recommend. BiggerPockets is a good site, but they have a lot of people who don't realize how different the markets are in different areas.

For your first couple of places, don't worry about turning massive profits. Worry about doing things carefully and correctly. That means make sure there are clean titles, run shit through real estate lawyers when applicable, and for the love of everything, get things fully inspected. Don't be afraid to walk away from a deal that looks good if things aren't in order initially. Worry about cutting corners and taking on larger risks once you know what you are doing, and have the start of a business network going to handle stuff.

You WILL turn losses at some point. By being careful initially, you can get your feet under you well enough to take them in stride.

Lunatick
Lunatick

@Fried_Sushi
Cool thanks for the info, I'll lurk and bump

Booteefool
Booteefool

@TreeEater
You should flip the image 90 degrees

likme
likme

burgers

making 15$ an hour, cant complain

Disable AdBlock to view this page

Disable AdBlock to view this page