This is an interview on flipping houses with my son, Jay Vitale, Vital Energies,LLC in Ocala, FL. As you can see, investing has turned into a family business. He manages my buy and hold properties in Florida, as well as a buy and hold that he bought this year for himself, and he was the one who fixed up my portfolio houses for rentals when we first bought them. He was also the one who identified our 3rd Ocala house (which I have never seen) as one that should be in our portfolio. By then he knew exactly what we were looking for and it has been an excellent investment both in terms of equity (doubled in market value in 2 years) and in monthly cash flow.
How many houses did you flip in 2017?
How did you start flipping houses?
I went into business with you [the author /Mom], remodeling some of the family houses and realized I can learn as I go and apply that to flipping instead of just buy and hold.
What was your best flip this year, and why?
The first one netted me the most profit with the least amount of work: $18,000 and 3 weeks worth of work. My neighbor said “Hey, you buy houses, don’t you?;” and I said, “Yes I do.” He said “I think I have one for you” and put me in touch with his friends who had a house they bought for their adult child who failed to keep up his agreement to make the mortgage payments. They needed to get rid of the house pretty quickly. He didn’t really know the market – he could have gotten more money for it in the condition it was in, but hadn’t done the research and didn’t want to wait. So I interviewed a couple of investors to help buy with cash and found one to work with me.
How did you find investors?
The guy I ended up working with all of this year has been giving me odd jobs for the last ten years and was willing to go into partnership with me on the first flip and then ones after it.
What was your hardest flip this year?
The fourth flip because it took four months and I thought it would only take 3. Additionally, the quality of work had to be dramatically better than the other houses because it was $235,000 and the others were in the $80K – $130K range.
Did you run into other difficulties?
Carrying my finances without working side work for 4 months really hit my bank account hard. If I were to do it again, I would look for cheaper hard money and allow time to work side jobs while I do it so I’m not living off my bank account.
Will you do flips in 2018?
If the right deal comes along, sure. But I’m not actively seeking that at the moment. I think it is less stressful and just as lucrative doing shorter duration jobs of remodeling and painting.
Did you think it was fun?
I think it was all a growing experience. There were parts that were fun and parts that were really hard, but I feel that I have a much greater skill set now all across the construction board because I had to learn as I went and had to stay after it until it worked.
If someone wanted to get into flipping, what are three things your would tell them?
- You find the best houses if you find them before they hit the market. You do that by talking about it to everyone so, just like my neighbor, people know who to come to. I don’t use an agent when I buy. I work with a title company – you don’t need an agent when you find a house this way because you are working directly with the seller. I do use an agent when it comes time to sell the house.
2. Be willing to always shop prices if you sub work out. Make subs compete for your business. Don’t be afraid to ask for what you want.
3. Be patient and don’t put all your eggs in one basket so that you can keep on looking until you find something that feels right. That way you are not desperate and messing yourself up by grabbing for deals that aren’t that good.
“If you provide a good product that people want, they will work beyond their current lenders. For instance, with my last flip the first appraisal came in low. We discovered it was by out of town appraisers and the bank wouldn’t change to a local one. So we worked with the buyers to find a local lender with in-town appraisers to take another look at the deal. With everything the same, the 2nd appraisal came in the $6,000 higher that was needed to close the deal so that the buyers wouldn’t have to come to the table with extra closing money.
“Finally, I think for me, that on my first flip, it was 3 weeks or so worth of work, but about 3/4 of the way through my list keep getting more lists and more lists, and I ended up in my car giving myself a serious talking to – that this was what I wanted, and that “I am going to see this through and finish the details off.
“I’ve learned that the last 10% of any flip is where the devil is in the details. If you are really trying to polish what you have, it gets tough. So don’t be discouraged if you get discouraged. Be patient with yourself and give yourself the time you need to get the product where you want it.”
Tammy Vitale is a Realtor/GRI (Graduate, Realtor Institute) working with RE/MAX One in Prince Frederick, Maryland. She has been an investor since 1999 and a Realtor since 2015. “If you want to upsize, downsize, or just-right-size your personal residence or real estate portfolio, you can count on me for expertise and enthusiasm at your service.”