By Marty Boardman, Experienced Real Estate Professional And House Flipping Coach
Back in 2012 my business partner, Manny Romero, and I started fixing and flipping houses in Milwaukee, Wisconsin. However, both of us live in Phoenix.
Our city was ground zero for the housing collapse in 2008. And, kind of like a Phoenix, the market in our hometown rose from the ashes quickly as hedge funds, foreign buyers, and mom and pop investors flocked to the valley of the sun to snatch up distressed properties at a record pace.
Practically overnight, all the good deals were gone.
Rather than compete with all these investors for tiny profits, Manny and I decided to find a new market to do business in.
We ended up choosing Milwaukee.
Why? Well, we jokingly tell people it’s because we love beer, brats and cheese.
But the real reason is Milwaukee, like a lot of Midwest markets, has much older housing stock in need of repair. More importantly, it has a lot fewer investors to compete against.
On the Road Again, and Again and Again
This means we have to go back and forth from Phoenix to Milwaukee.
Naturally, I’ve learned a few things from all this time on the road…
People, specifically air travelers, can be really gross.
I once sat next to a guy that practically inhaled a burrito the size of Arnold Schwarzenegger’s forearm before takeoff. But that wasn’t even half as disgusting as smelling his burrito burps for the next three hours.
Another thing I’ve learned is that air travelers can also be very impatient.
Just this afternoon, I made my way through the security checkpoint and was waiting for my bags to come through the X-ray machine. The guy right behind me in line was in such a rush that he actually tried to get ahead of me after we made our way through body scanner, even though his bags were in back of mine on the conveyor belt.
Imagine my delight in blocking him from reuniting with his carry on. I felt like a 7-foot NBA center.
Be Quick, But Don’t Hurry
Lately, there sure seems to be a whole lot of people, like my impatient air traveler friend at the security checkpoint, rushing into the business of fixing and flipping houses.
Perhaps you’ve been watching those home makeover programs on HGTV…
Maybe there’s a distressed property in your neighborhood and you’ve thought to yourself, “I can do this house flipping thing!”
Regardless what your motivation is, remember the words of legendary college basketball coach John Wooden, who told his players…
“Be quick, but don’t hurry.”
Do This First Before You Buy a House to Fix and Flip
It’s important you learn as much as you can about your real estate market BEFORE you buy a house to fix and flip.
This means knowing what median prices are in your city and zip code, where houses sell the fastest (and the slowest) and what contractors charge for things like paint, flooring, kitchen cabinets and countertops.
A lot of new investors are in such a rush to buy their first house that they pay no attention to what is happening in their market. They’re unaware of how a busy street, an overabundance of housing inventory, or a poor school district can affect the value of their property. Often this lack of knowledge results in financial disaster.
This isn’t the kind of stuff they talk about on reality TV shows, and it’s certainly not something a real estate investment guru will teach you, but this information is vital to creating sustained success.
So before you invest your money in a property to fix and flip, invest your time researching your market.
Before Manny and I expanded our business to Milwaukee, we spent several months learning about the stats and trends in the area first. It was well worth our time and it helped us quickly identify our acquisition strategy.
The process was actually fun.
We discovered several undervalued neighborhoods to buy in…
And, some excellent places to get beer, brats and cheese.