BiggerPockets Podcast 010 : Flipping Houses 101 with J Scott

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House flipping is one of the most popular methods of investing in real estate. However, it’s sometimes difficult to know exactly how to get started, as there are thousands of blog posts, articles, forum posts, and more about the topic. In today’s Podcast, we talk with one of the best in the business, J Scott, about how he got started flipping houses and how you can follow the same strategies to build your own real estate investing business.

Read the transcript of Episode 10 with J. Scott here.

Listen to The Show on iTunes

Click here to listen on iTunes.

Listen to the Podcast Here

In Today’s Flipping Podcast, We Cover:

  • How a TV show got J started with flipping
  • How J made every mistake possible on his first flip…but still made money
  • Tips For Working with a wholesaler and tips for wholesalers to work with flippers
  • Multiple exit strategies for flippers
  • What the “sweet spot” is in terms of profit
  • The “flip formula” and how to use it to estimate your profit.
  • How to determine the “after repair value” of your property.
  • Why you should get your real estate license.
  • Why having a construction background might not be great when flipping.
  • How J’s got his days-on-market down to a 17 day average.
  • Tips for finding a great project manager.
  • How to find private lenders to fund your deals.
  • Automating you flipping business to flip while holding a full time job

Links From the Flipping 101 Show:


Books Mentioned in the Show

Tweetable Topics:

“You gotta be conservative in your numbers, so your ‘beginner mistakes’ will be covered.” (Tweet This!)

“Always have 2, 3, or 4 exit strategies as a backup on your house flips.”(Tweet This!)

“What you did yesterday may not work tomorrow – you need to be flexible in your business.” (Tweet This!)

“Pricing a property right is key.” (Tweet This!)

“You don’t raise money if you don’t ask. It’s not rocket science – it’s just hard work.” (Tweet This!)

“It takes work and a lot of up-front preparation – but business automation is possible.” (Tweet This!)

“Putting together a plan on paper will help you figure out where your gaps in knowledge are.” (Tweet This!)

“Real estate investing education shouldn’t cost as much as a college education.” (Tweet This!)

“Those who do best in this industry are those who work ON their business, not IN their business.” (Tweet This!)

Thank You!

Thank you again to everyone who has subscribed in iTunes to help make us one of the top business podcasts in all of iTunes! We’re up to 145 5-Star Reviews so far with over 65,000 downloads! Every subscription in iTunes and every review helps us reach more people – so thank you!

About J

J Scott runs Lish Properties LLC, a real estate investment company in the west suburbs of Atlanta, GA that specializes in purchasing, rehabbing and reselling REO properties. Along with his wife, J purchases and renovates about 15-20 houses per year. In addition, they consult to other investors, manage rehabs for other investors, and stage/list/market properties for the investors they work with.

J’s BiggerPockets Profile
J’s Facebook Page

What do you think? Do you have any questions or comments for J or about the show? Leave your thoughts below!

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 180,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!


  1. Can someone please point me to the podcast notes? I must be blind?

    Thanks J.Scott and BP for all the valuable info you post.

    Sorry about all the questions, but you are my new role model 🙂

    1. You mention “fixed” cost? as with the 70% rule, are most project cost not actually variables and based on variables? Like purchase price and days on market, 17 days for a new REI? What would you say is more realistic. I guess this is where the MLS would help once again.

    2. My sales market is about like your’s in Wichita, KS median home sale $120K. Not sure what you meant by “home run”? In higher sales price areas like CA there are higher “fixed cost”. including the cost of living, so higher profits there are not as valuable as in our areas? Do you have a deal worksheet per your formula on BP or your website? Like you I’m an detail conservative, not to big on using percentages.

    3. I’m finding I am crippled w/o MLS so will look into a license as you suggested. You say your latest strategy is to work through it and banks, short sale listed with you? So you talk to the banks directly, negotiate a price reduction, then list the short sale under a broker? You send letters to owners off MLS?

    Comment: I’m not really a write down a plan type guy(use to be) unless someone needs to see it like a lender. After being a tech designer most of my long life my plan is in my head and developed as I go. I do however take notes. I am seeing so many facets of REI to explore, it just a matter of understanding your market , strengths and weakness, etc, as you point out, then making that first move, where we are at, and adopting to change as you say.

    Agree, BP is a great learning tool. I feel like I am college again, ha! I agree a lot of this is not rocket science, but there sure is A LOT of volume to explore and learn.

    Thanks again,

    Terry 🙂

    • Hey Terry,

      I’ll try to answer these as best I can:

      1. Certainly, there are variables, and something like days on market are one of those variables. But, I’m conservative, and I like to base my “guesses” on conservative numbers. So, while I know my average hold time is 100 days or so, I’ll always assume that I’m holding a property for 6 months. Then, I’ll calculate my fixed costs based on that hold time — taxes, insurance, utilities, lawn care, etc., will be calculated using the 6 month conservative assumption. Then, when I sell more quickly, I make more than I originally estimated!

      2. I think of 15% of resale value as being a minimum profit target. This is a “single” for me. That said, I know some rehabbers who make 40% on many deals — that’s a homerun in my book! I don’t see too many of those. Yes, I do have a rehab analysis worksheet available both on my website and in the BP file vault.

      3. For our short sale deals, we’re finding the seller and then we’re handing the seller over to another agent who we have a partnership with. This agent lists the short sale and works with the seller to negotiate the short sale with the bank. We are just the buyer in the transaction, and we don’t get involved with the seller or the bank once we hand the lead off.

      • Got it thanks! You mentioned the word “quality”, I work for big manufactures and will offer a little on a term we use called, “continuous quality improvements”, “six sigma” “lean processes” you can goggle. Basically looking for ways to lean out you’re processes by offering your team incentives or rewards for ideas. Whom better to solicit then the ones actually doing the work.

  2. Great Podcast J,

    Very detailed info on flipping houses and great points on running a successful flipping business. Also, looking forward to finish reading your book. (great info as well!!!)


  3. Michael Woodward on

    Hi J. I also want to thank you for doing the podcast. This three-way conversational format is great for sharing this kind of information. Thanks also to Josh and Brandon for the effort you’re putting into the new podcast “system”. It’s an awesome way to absorb BiggerPockets knowledge while driving. Thanks very much for putting it together!!

    J. You’ve created an impressive flipping system. The thing that really stood out to me about your business in your incredibly short days-on-market average. In my opinion, out of all of the data surrounding a flip business, this is the very most important number to optimize. The entire business model pivots around that number. It’s THE indicator of success (as long as profits are in line with expectations…. which yours obviously are). What part of your sales plan do you think contributes the most to selling your houses so fast? If it can’t be limited to a single process, can you share the combination of processes that make it so short?



    • Hey Mike,

      Great question! There are several factors that I believe contribute to that short DOM number:

      1. We turn out a consistently great product that appeals to our buyer demographic.

      2. We have great relationships with the most active buyers agents in our area, and we’re constantly communicating with them and letting them know when we have upcoming properties. We also make them feel special by allowing them to “preview” the properties before they hit the MLS, and we offer agent bonuses for full-price offers that close. My wife gets full credit for building these strong relationships and the great marketing efforts.

      3. We price our properties at market value, but ensure that the quality sets them apart from our competition.

      4. We make the transaction incredibly easy — we offer closing cost assistance to our buyers, we make pretty much all requested repairs, we handle the closing process from beginning to end, etc. Because of this, buyer’s agents LOVE to work with us, as they know it will be stress free and hassle free for their clients (and for them).

      Something important to note is that 40% of our buyers are brought by agents we’ve worked with in the past. In other words, agents WANT to work with us over and over, and we’ll actually give up a little profit if it means working with an agent we’ve worked with in the past. These agents will then go out of their way to encourage their buyers to work with us.

      • Michelle Cobbs

        Hi J.

        This is great advise so you work with several Agents on an on going basis. If I can ask how many agents are in your funnel. My plan is to reach out to at least 2-4 in my area its sounds like I should probably increase that number a bit. I agree that they are willing to work with investor’s the same day I emailed this agent she has already responded with details of a 2-family home she has available.

        Great podcast BTW.

        • J Scott

          Hey Michelle,

          These days, very few of our deals are coming off the MLS, so we don’t work with many agents. Most of our leads are coming from wholesalers, so that’s who we’re trying to build relationships with these days…


  4. J. Scott,
    Dude, you really brought the goods to share. I like your Warren Buffet-like approach to selecting deals. Throw some monte-carlo simulations in there to tighten up you statistics. It might help you handle risks with less emotion / under-exposure.

    Dynamic Duo,
    Keep hitting home runs with the show. Nice work fellas. You make for entertaining carpool conversation.

  5. Just got done with the podcast and thank you to J. Scott for everything you have put together. I got 3 pages of notes from the podcast alone and the 2 books waiting for me. Appreciate the hand up.

    Thanks to Josh and Brandon for another spectacular podcast. Well done and thank you.

  6. No offense to any of the other guests (because all have been great), but hands-down J owned this show. I’ve been following J’s blog for the last few months and just recently purchased both his books, but it was great to hear him speak. One of my favorite topics was on the subject of getting your real estate license. I recently enrolled in my local community college to do just this. I had a lot of reasons for doing it, but J really broke down everything and made me feel even better about my decision. Keep up the great work Brandon & Josh!!

  7. @BrandonTurner, something you said in the show 10 podcast caught my attention. You mentioned you can’t property manage in your state until you’ve been an REA for 2 years. Does anything prevent you from subletting a property? Have you heard of Master Leasing or Sandwich Leasing? It effectively allows you to oversee the rental management of a property you don’t own by leasing it as a “master tenant” then subletting it to a “resident tenant.” @DavidTilney teaches this and I was just listening to him before I heard your latest podcast. There are some nuances and it’s wise to be added as “additional insured” on landlord’s policy. But I’ve done this both as the property owner and master tenant.

  8. Hey Guys. I loved the pod cast with J. Scott. He was so informative and without the hype. I really enjoyed his answer to how to find “private money”. I guess that goes to the saying ” A closed mouth never gets fed.” I truly believe everyone knows someone that perhaps has retirement money, that may want to receive a larger percentage rate on some of that money, than is not being offered by the financial institutions. This pod cast was so inspiring for me. I certainly will be purchasing J’s book regarding “Flipping” and I know the second book included “Estimating Rehab Cost” will be a winner for sure. Again Guys, thanks for these pod cast and I am so glad that I am a member of BP.

  9. Hi guys, great podcast. I have listened to all of them and this one is perfect for beginners.

    J, one thing you said caught my attention. You mentioned paying your project manager a percentage rather than a salary. That is something I have never thought about. A percent would definitely intice that person to work harder for you.

    My question, what percentage amount do you pay? Also is that percentage off only your net profit or the selling price?

    • Hi Alex,

      Paying a percentage of the profits ensures that his interests are 100% aligned with mine (we both want to turn out a great product in the shortest period of time for the highest profit).

      I pay my Atlanta PM 15% of the net profits (not the sale price) plus a small monthly salary.

      • Thank you J for your reply. One last question, I don’t know if this will be covered in a future podcast or not. But how do you have your company setup? Do you have an LLC for each property or do you purchase and sell homes all under one LLC? The reason I ask is you flip alot of homes each year, have you ever run into any lawsuits or a worker got hurt on your property? My CPA suggested creating an LLC for every 4-5 houses, because that limits your risk if something should happen. I am curious how a pro like you has the business setup. Thank you again for the great info.

        • Glen Godwin

          I have the same question. It seems to me that creating multiple LLC’s (whether each LLC holds 1 property or 2 or 3….etc) is an expensive proposition. LLC’s cost $1500 to form in my area. And too you have the record keeping hassle for each LLC.

          But on the other hand if all of one’s properties are in a single LLC then the value of the entire LLC is at risk for anything that goes down on a single property.

          Surely there must be a clean cut and inexpensive way to address this.

          Anyone have any ideas?

  10. Christine Antonelli

    I just started listening to your podcasts…and love every single one. This one I wrote down many notes since I am an agent and now looking to start flipping many of the tips said on this podcast, I will be able to use. Awesome job!

  11. Julie Marquez

    Great podcast, and I also love J’s books. Out of all the real estate investing books we have, his are my husband’s favorites. I had no idea J didn’t have any construction background before starting, though is content is very good. Thanks for all that you share and contribute to Bigger Pockets!

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