BiggerPockets Podcast 044: Creating Systems to Flip Houses While Still Employed with Michael Woodward

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Trying to investing in real estate while holding a full time job is tough – but trying to flip houses can be even tougher. From dealing with contractors to finding money to getting the deals in the first place – flipping often feels like a full time job in itself. Luckily, today we talk with someone who is doing all those things while working a demanding day job – and finding great success at it. Michael Woodward sits down with us today to show us the systems he uses to balance both his house flipping with the rest of his life – all while maintaining a full time job. Whether you are a flipper, wholesaler, or Buy and Hold investor – you don’t want to miss this great interview on systemizing your business.

Read the transcript for episode 44 with Michael Woodward here.

Listen to the Podcast Here

 In This Show, We Cover

  • Why Michael quit his job – but ended up going back into a full time job again
  • When’s the right time to quit your job?
  • Failure – when it’s necessary
  • Learning the tough lessons about doing your own work
  • One trick to help you find the very best contractors
  • What’s the “Ideal Flip?”
  • Why Michael fully furnishes all his properties
  • Dealing with troublesome neighbors
  • How Michael is funding his flips
  • Managing a flip while working a full time job
  • The List System that helps Michael know what comes next in a flip
  • The best place to buy appliances
  • and a lot more

Links from the Show

Books Mentioned in the Show

Tweetable Topics

The nice thing about BiggerPockets is the ability to share what we know. (Tweet This!)
If you’re going to go big you’re going to have to fail somewhere. (Tweet This!)
You can talk yourself into any deal. It doesn’t make it right.  (Tweet This!)
The only way to invest in real estate while holding a job is to have systems. (Tweet This!)

Connect with Michael

Michael’s BiggerPockets Profile

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. Great job. I enjoyed the emphasis on the importance of having a system. It does seem like 6-7K is quite a bit to spend on furniture (especially since it is considered personal property and won’t be considered in the appraisal). This is unconventional, but hey, it’s working. At the same time, I wonder if there was a way to spend half that money to entice the buyer to get in the door.

  2. Michael Woodward on

    Thanks Ryan. That’s a good question about the furniture. For me, the hard part of making any decision when it comes to spending money on a project is the unknown. I have to make decisions about what to do (or not to do) based on experience and/or my gut. I recently spent a couple thousand dollars covering a basement ceiling with drywall because I was getting feedback that people didn’t like the bare ceiling. When I was at the closing with the buyer, he told me that he really wished that I had NOT covered the ceiling. That was a real moment of realization for me that you can never know for sure what’s the right thing to do.

    I’ve found that furnishing a flip house is like turning on a giant spotlight in the sky. It gets lots of attention which is CRITICAL to selling a house. There are a lot of buyers out there so you have to get their attention somehow. This is the best way I’ve found to do it but I will take your advice and keep looking for a cheaper way.

    Thanks for your input!

    • I like how you said “spotlight” above. Everyone needs to find that spotlight. I can tell you put lots of thought into what you do. I get the sense you are really trying to do things the right way too. I respect that. There are certainly some in the real estate industry that would benefit from doing more of that.

  3. Rick Baggenstoss on

    Enjoyed the podcast.

    It really comes across that you’re producing an excellent product … some would call a solution — a move in ready house that only needs groceries. Over time, I’m betting you’ll be able to sell the furniture on consignment or let your local reputation or brand be the spotlight. It’s very clever to include the furnishings. The buyers get everything ‘like new’ financed as cheaply as possible. I’m going to steal your idea and start adding more to my houses.

    As a part time flipper, I appreciate the focus on systems. I’ve had the same issues of being overly involved in the early ones. However, as a newbie, you have to be deeply involved to understand, define, and ultimately, innovate the process. One can’t fully appreciate the importance of a good sheetrock and paint job unless you’ve seen how costly it is when done poorly.

    Thanks for sharing!

  4. Michael, picking sub contractors by how they are rated by the subs who follow their work is genius. Thanks for that valuable tip. Also, to do two rehab flips per month while you have a full time day job is quite impressive. I can definitely see where having great systems in plays pays off. Thanks for sharing!

  5. Michael Woodward on

    Nick G. – Thanks for the compliment! I was building new houses in SW FL (North Port). I didn’t do any flips down there.

    AL Rivard – I buy all my houses in my personal name with no legal entity. My accountant advised me to keep it this way while I’m working a full time W-2 job. Title work is done by several of my local title companies.

    John Allevato – I’ve been buying everything from Fowlers Furniture. I bought some furniture from them when they were having a big moving sale and got to know the #1 decision maker. He knows that I buy a lot of furniture so now I get pricing way below sticker price. I’ve learned to aim REALLY low when making offers on furniture because their markups are very high. No this (furniture buying) is part of my system. I haven’t been inside Ikea but I will do that to compare prices. Thanks.

    Will – Thanks for the compliment! The evaluater I’m using on my smartphone is actually an Excel spreadsheet rather than an app. Eventually, I would like to have and app developed but that’s pretty expensive so I’ll wait until it justifies the expense.

    Tom Sylvester – It has it’s goods and bads for sure. I like having an element of security but it takes FOREVER to get things done sometimes. I know you can relate. Good luck!

    Rick Baggenstoss – Thanks for the compliments! I appreciate that! I continually monitor feedback from buyers and track the “performance” of every sale so I can make adjustments when needed. If I see evidence that I’m leaving too much money on the table I’ll consider scaling back the furniture expense (or selling on consignment, etc). Selling fast is the most important thing to me so I make adjustments carefully.

    Jon Klaus – Thanks! I hope the information will be of use to you. Good luck.

  6. Very interesting interview.
    Like others I find the furniture thing fascinating.

    It does make sense though as I have heard many stories of buyers loving the staging furniture and décor and asking for it in the offer. It also seems that with the popularity of staging that those prices have gone up to the point that if you are getting volume discounts on the stuff you buy it might not really be that much more.

    How often to people say they don’t need or want it?

  7. Jennifer Turner on

    I appreciated this podcast as I am constantly trying to create systems in my job (teacher) so I can focus on learning more about real estate instead of taking home school work. Michael, thank you for sharing your insight and experience. Joshua and Brandon, thank you for asking the questions I wanted answered.

    • Patrick McMahon on

      Michael’s comments about creating systems and lists really resonated with me. Since I studied engineering and teach Physics, I am all about processes and systems!

      Since I’m a teacher (like Jennifer), I am trying to create systems for my “day job” so my “side job” (real estate) can be more productive.

      I’m reading “The E-Myth” right now and see how it would be helpful to create SOP’s for my real estate ventures, too. I haven’t done so yet because I’ve only been purchasing one buy & hold property a year and figured I could keep everything straight in my mind. However, I seem to reinvent the wheel each time.

      I also need to increase my organizational skills in general because tax time tends to be a nightmare. Really, I need to hire an accountant. And create SOP’s.

      • Michael Woodward on

        Patrick – If you add “The Millionaire Real Estate Investor” by Gary Keller to your reading of “The E-Myth” you will have a very good foundation for your real estate education… well as reading as much BP as possible of course. Thanks for your input!

  8. Michael Woodward on

    Shaun – Thanks for the compliment! Sometimes I wish that I had time to be a Realtor so I could have a chance to actually see the reaction people have to the furniture. I get some of that kind of feedback from my Realtor but it would be better to get it first-hand……on the other hand, I don’t really want to do that part of the process myself. I’m happy to let him handle it.

    You make a good point that the cost of staging isn’t that much less than buying the furniture. In fact, I’m pretty sure that by the time I paid for storage (to keep the furniture between projects), the moving crew to set it up and tear it down, and other misc expenses the total “price” (including time) is probably less to actually buy the furniture.

    It’s an interesting coincidence that I happened to go to the furniture store today to pick out the furniture for my latest project. I spent about a half hour with the store manager/owner picking out furniture for this house. My next project is about four weeks behind this one and it has a nearly identical floor plan so I told him to put together two identical sets. We also talked about standardizing this package so the next time I have a project, all I have to do is tell him what rooms I’m going to furnish and he’ll pull it all together for me.

    Investing some time with this store manager/owner has reduced this task to a simple phone call which really improves my overall project efficiency. For $100 extra, they will deliver the furniture (30 miles), carry it into the house, and fully assemble the whole thing. I gave him a budget of $3500 to $4000 to do the entire package…..and this is really nice furniture…..nothing used or weird.

    All things considered, I think this is an incredibly good deal that will really help sell the house fast.

    With regard to your question…. I haven’t had anyone say they didn’t want the furniture.

    Jennifer – You’re very welcome. I hope the information will be useful to you. Good luck!

  9. Excellent interview and keep up the great work!

    I too am a day job/investor/real estate broker…and in that order for now. So I totally get it! You don’t have time to get it wrong so the analysis is key before you push the buy button. I think it’s great that as a investor you rely on your Realtor and the MLS (shameless plug for all the agents ;-)))

    I buy and hold and have been a landlord for a number of years, and can attest systems are the way to go. No matter how much I like a property or how good the numbers may seem, it the property won’t fit into my system, I walk away.

  10. Michael Woodward on

    Elizablue – Thanks! I’m amazed that you’re able to do the broker thing along with the job and investing. I’ve considered doing that but I just don’t have the stamina for it. Kudos!

    Another benefit to me of having no time for additional tasks is that I’m a recovering micro-manager so it’s helping me let go of some of the “control” that I used to hang onto.

    Good luck to you!

    PS. Cool name!

  11. Great episode Michael! (and Josh and Brandon too, of course)

    Thanks for some excellent information, you have some seriously great tips! I loved your suggestions for systemizing, getting good tradespeople and (whaaat?!!) furnishing your renovated properties. Judging from the comments above it appears your furniture technique was a bit controversial but definitely a popular concept with other BPers too! I just might try it!

    I have a question for you: I may have the opportunity to purchase a flip-worthy property whose basement was previously used as a marijuana grow op. If you were me would you take on a project like that? There’s some mold right through to the studs in some areas but otherwise it seems in decent shape. Good neighborhood, nice lot, easily fits the 70% of ARV rule, and of course any mold will be remediated but I’m worried the stigma of an ex-grow op will scare buyers away.

    Have you ever flipped a house with this issue? Any thoughts or suggestions are appreciated!

    Thanks Michael!

  12. Nathan Pickering on

    Michael, great interview (thanks Josh and Brandon). I appreciate your sharing your systems and the numbers. When you say that you are looking for $25K from a deal; is that pure profit? I realize that you are calculating the cost of all of the labor and materials when your analyzing a deal. Are you also deducting the closing cost, Realtor fees, holding costs, GC costs, unknowns cushion, etc.? Basically I’m asking if you are supplementing your full time income with an additional $150K annually (1 flip every 2 months at @ $25k profit)?

    These numbers get thrown out on the interviews and “flip that house” type tv shows, but I always wonder what the real profit is after deducting the business costs.

    Thanks, Nathan

    • I know when I talk about the profit on a deal, and other rehabbers I know, it is always net of all expenses associated with the project.

      So that would be the obvious purchase price and repairs. But would also include all the closing costs for the buy and sell, any financing expenses (points, fees and interest), holding costs like taxes, insurance, utilities, HOA fees and anything else like that, cleaning and staging (or in Michaels case buying the furniture) costs. Also any miscellaneous costs like Postage for mailing any physical documents, cost of Smoke certificates, bank/wire fees if you needed certified funds for a deposit and any other random stuff.

      What I would not include generally would be general business expenses. So things like my LLC registration fees, office supplies, general marketing to find deals (though if there is marketing to SELL a deal I’d put that in my miscellaneous stuff), general tools (Like if I buy a tape measure for example), general postage (i.e. Stamps), Educational expenses (books, audio/video courses, memberships to REIAs, etc.), General Legal, Accounting, and these kind of expenses.

      They are real expenses that will reduce your overall profits and will get put on your taxes at the end of the year, but not that easy to quantify to any given deal.
      You could track that for a while and assign an “Overhead” factor to each project.
      Of course I would argue that is a lot of effort for no actual gain. 🙂

      • Nathan Pickering on

        Thanks Shaun. So you would assume that virtually all expenses associated with a deal are calculated and therefore when you hear $20 to $30K profit you assume that’s the real profit for the deal (assuming were looking at a completed deal).

        I would agree on the other occasional “overhead” that isn’t necessarily associated with a particular deal. I don’t think I would factor that unless it was a fixed expense and was a significant portion of the profits i.e. $20 book (insignificant) vs $2,000 (significant) office rent.

        • One important point is that the number being thrown out there is pretty much always before taxes. Every persons situation can be different so that can change a lot from person to person.
          Similar with the overhead. The guy with a $2000 office rent will make less on the same gross profit than someone working out of his house. Though you’d hope that if someone is spending that money on an office they are doing more deals than they could handle without the space.

  13. Michael Woodward on

    Simon – Thanks for the compliments! I don’t necessarily recommend that everyone furnish their flips because I think it could be a good thing or a bad thing depending on exactly how it’s done. You can just as easily scare away buyers with the wrong furniture but so far it’s working for me.

    Regarding the pot house, I don’t think I would be too worried about marijuana residuals. I’ve never dealt with that specifically but I don’t think the remediation would be too bad. You should check with your local health department to see what they say. I would NOT call the remediation service provider first though because they will likely recommend all kinds of things that may or may not be necessary. Good luck!

    Nathan – Thanks! You are correct that the $25k figure is my target (net) profit before tax. I record every expense on a spreadsheet so I can see at any moment exactly (to the penny) how much I’ve spent on the project. At the end of the project, I subtract the total at the bottom of the column from the check I receive at closing. That’s the figure I was talking about. I think my ACTUAL average is a little over $20k. The worst I’ve ever done was about $1500 and the best was a little over $50k (although I was doing ALL of the work myself on that one…and it took half a year to complete…..and it nearly killed me…..that’s why I don’t do that anymore.).

    As I’m sure you’ve already calculated, this can be a very lucrative business but only if EVERYTHING is done right. It’s a lot like building an airplane. The whole package has to work just right to keep it in the air or it will crash spectacularly. Everyone has their own strengths and weaknesses. This is something that I can do. I’m very thankful for that!

    Best to you and your business!

    • Nathan Pickering on

      Thanks Michael. That is extremely helpful to understand when considering the pros and cons to flipping vs wholesaling vs buy and hold. I think many wholesalers need to consider the cost to find each deal and talk about that when sharing the $5K to $10K “profit” scenarios. Your success is truly inspiring. I hope you have time for more hobbies in the near future. 🙂

  14. Michael, I just finished listening to the podcast. May I say, you got your act together. My huge dilemma as a newbie wholesaler is estimating repair costs for fellow rehabbers and buy & holders. However, it is my belief that if I had an awesome excel sheet where I could simply plug in the necessary repairs, it would make my job a whole lot easier. If it’s not asking too much, would you be willing to upload a sample of your different checklists, excel sheets, and systems that you use? I know it’s asking a lot, but I thought I’d give it a shot. I learned an incredible amount of info from your podcast. As a full time teacher, there are enough hours in the day to do what I got to do. Systems would definitely help me be more efficient.

  15. Michael Woodward on

    Thanks Max! The system of spreadsheets and project files that I created has changed a lot over the past year and I haven’t had time to clean it up to make it usable outside of my personal PC. I’m able to use it fairly efficiently because I know where everything is and how to manipulate it but it would be confusing for someone else to use. I will probably upload some files to the Resources area after I’ve had time to make it more user friendly.

  16. Thank you Michael for sharing your experience and expertise. Great insight, and a perfect tip for BP about asking the trade guys that do the follow up work who they would recommend. Putting it all in my arsenal.

    Enjoy the Holidays!
    Jack Coughlin

  17. Hi Michael,

    I am a virgin BP reader and I listened to your podcast on flipping the other day. Would you be interested in getting your excel spreadsheet on your phone and convert it into an app? I have a friend who makes apps for a large IT company.

    Keep killin it!


  18. Michael Woodward on

    Thanks Jack!

    Spencer: I will probably do that eventually but I’m not ready to do it yet. The details within my system are continually being tweaked and refined. When the overall system reaches a point where it hasn’t changed significantly over a period of about a year, then I’ll look into doing something like that. Thanks for asking.

  19. The furnishing is working for me. I am a buy and hold investor. I buy condos in Montreal at market price out of the MLS, but then I furnishes them and rent them furnished for a premium and that it where I make my $$. I buy all the furniture in Ikea and my female friends love helping me with the decoration. We always do a big housewarming party when the decoration is completed and then it is usually rented within one week.

  20. Michelle Cobbs

    Great podcast, thank you for all involved. Michael I love furnishing the homes as well I have never heard of that, staging yes but not fully furnished absolutely GREAT!!! It’s great to here that systems can be in place to do this business that is something I am very interested in and will be listening again to the podcast to get my notes down. Thank you Again.


  21. Pam Dorsey

    Hello Michael – Awesome podcast! A ton of great information! Curious if you have tweaked the spreadsheets and now feel comfortable sharing them! Or would you be willing to share how one would go about creating something remotely close. I’m not that technically savvy, but would love to give it a shot! I LOVE the timeliness of this system!

    Many Thanks!

  22. Lara Fobian

    Awesome info, Michael, thank you! Echoing others’ comments, “If it’s not asking too much, would you be willing to upload a sample of your different checklists, excel sheets, and systems that you use?” Or even charge a fee for access? Would be much appreciated, even if not 100% neat or complete.

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