First Fix & Flip
David GillettePro Member
Member since 2024 · 14 posts · 2 votesFirst Fix & Flip
Most Popular Reply
Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes
1yNobody passes on a good flip that they already own. That's like mining gold in Alaska, bringing it to San Francisco and saying, "I can't do the rest, take it off my hands at a discount." All the hard work is already done.
They either know something that you don't or you know something that they don't(the only correct answer is if you know it's worth more than they think it is)
Otherwise you're likely buying fools gold. Given that I hear this story once per week with people doing their first flip... I'd steer clear
30 Replies
- 1yNoah CorwickPro MemberRealtor · Phoenix, AZ · Member since 2021 · 271 posts · 115 votes
Hi David,
This could be for a plethora of reasons, as every scenario in real estate is completely different.
Maybe they don't have funding anymore or can't afford their holding costs. Average Days on Market has gone down a tad from last month, but is still at around 80 days.
Maybe their contractor can't perform the work and is too busy with jobs.
Did you bake yourself an inspection period? I'd recommend touring the property with your Contractor.
Every scenario is different so more context about the property is needed. I also might ask them what changed and see if you can sense a BS sort of answer and feel them out a bit.
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Noah Corwick:
Hi David,
This could be for a plethora of reasons, as every scenario in real estate is completely different.
Maybe they don't have funding anymore or can't afford their holding costs. Average Days on Market has gone down a tad from last month, but is still at around 80 days.
Maybe their contractor can't perform the work and is too busy with jobs.
Did you bake yourself an inspection period? I'd recommend touring the property with your Contractor.
Every scenario is different so more context about the property is needed. I also might ask them what changed and see if you can sense a BS sort of answer and feel them out a bit.
Noah,
I really appreciate your feedback. You're absolutely correct, I figured it was a bit of a loaded question. I could only imagine how many different things it could be. My wife is also a realtor. I'm going to have her call the agent with a laundry list of questions. Maybe she'll be able to pull out some more useful information. I was thinking of doing a 14 day close and get my GC in their with me tomorrow. I haven't seen the property in person yet. When I asked why they were selling, she just said the investors decided to move on from the project. I should have dug deeper. Great learning experience though. Thanks again man! I'll let you all know if I go under contract.
- 1yNoah CorwickPro MemberRealtor · Phoenix, AZ · Member since 2021 · 271 posts · 115 votesMy pleasure!
Quote from @David Gillette:
Quote from @Noah Corwick:
Hi David,
This could be for a plethora of reasons, as every scenario in real estate is completely different.
Maybe they don't have funding anymore or can't afford their holding costs. Average Days on Market has gone down a tad from last month, but is still at around 80 days.
Maybe their contractor can't perform the work and is too busy with jobs.
Did you bake yourself an inspection period? I'd recommend touring the property with your Contractor.
Every scenario is different so more context about the property is needed. I also might ask them what changed and see if you can sense a BS sort of answer and feel them out a bit.
Noah,
I really appreciate your feedback. You're absolutely correct, I figured it was a bit of a loaded question. I could only imagine how many different things it could be. My wife is also a realtor. I'm going to have her call the agent with a laundry list of questions. Maybe she'll be able to pull out some more useful information. I was thinking of doing a 14 day close and get my GC in there with me tomorrow. I haven't seen the property in person yet. When I asked why they were selling, she just said the investors decided to move on from the project. I should have dug deeper. Great learning experience though. Thanks again man! I'll let you all know if I go under contract.
That's awesome that your wife is a Realtor (better spread for you). I would definitely have her call the Listing Agent with your laundry list of questions and just try to sniff it out.
Let me know how it goes. I'm invested now.
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Noah Corwick:
My pleasure!Quote from @David Gillette:
Quote from @Noah Corwick:
Hi David,
This could be for a plethora of reasons, as every scenario in real estate is completely different.
Maybe they don't have funding anymore or can't afford their holding costs. Average Days on Market has gone down a tad from last month, but is still at around 80 days.
Maybe their contractor can't perform the work and is too busy with jobs.
Did you bake yourself an inspection period? I'd recommend touring the property with your Contractor.
Every scenario is different so more context about the property is needed. I also might ask them what changed and see if you can sense a BS sort of answer and feel them out a bit.
Noah,
I really appreciate your feedback. You're absolutely correct, I figured it was a bit of a loaded question. I could only imagine how many different things it could be. My wife is also a realtor. I'm going to have her call the agent with a laundry list of questions. Maybe she'll be able to pull out some more useful information. I was thinking of doing a 14 day close and get my GC in there with me tomorrow. I haven't seen the property in person yet. When I asked why they were selling, she just said the investors decided to move on from the project. I should have dug deeper. Great learning experience though. Thanks again man! I'll let you all know if I go under contract.
That's awesome that your wife is a Realtor (better spread for you). I would definitely have her call the Listing Agent with your laundry list of questions and just try to sniff it out.
Let me know how it goes. I'm invested now.
Ha Ha, appreciate you wanting to help and follow along. We just got off the phone with the agent. I guess the picked it up from a wholesaler. MLS says they close for $60k but the agent was telling us that often when it's a cash wholesale transaction it doesn't record on MLS accurately. She said they bought it for a lot more than $60k. She's going to find out for how much. They originally listed for $250k in Feb. Have since dropped the price down quite a bit and will be willing to sell to me for $142k
I just checked County records. No liens or anything
- Real Estate Agent · St Petersburg, FL · Member since 2019 · 320 posts · 182 votes1y
The simplest and most direct is to ask the sellers.
Aside from understanding the seller's motivation-
What has your due diligence looked like thus far on this property?
contractor walk thru? Public records search for liens and permit history? Talked to neighbors for history on the property?
Are there strong comps and demand in the area for the finished product?
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Obed Calixte:
The simplest and most direct is to ask the sellers.
Aside from understanding the seller's motivation-
What has your due diligence looked like thus far on this property?
contractor walk thru? Public records search for liens and permit history? Talked to neighbors for history on the property?
Are there strong comps and demand in the area for the finished product?
Obed
Thank You for the feedback and questions. I've only seen the property virtually but plan on running over there tomorrow with my GC. With that said, I've been pretty thorough with regard to the Bigger Pockets fix and flip worksheet/calculator and am confident my numbers are in line. I haven't checked for liens and or permit history but thank you for reminding about that ha ha. Comps are strong, inventory is low and I would say there is a decent demand for the area.
Thanks again! I really appreciate it. I have to right down all of your questions and suggestions in my notebook, that way I can revisit with every deal.
- Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes1y
Nobody passes on a good flip that they already own. That's like mining gold in Alaska, bringing it to San Francisco and saying, "I can't do the rest, take it off my hands at a discount." All the hard work is already done.
They either know something that you don't or you know something that they don't(the only correct answer is if you know it's worth more than they think it is)
Otherwise you're likely buying fools gold. Given that I hear this story once per week with people doing their first flip... I'd steer clear
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Kyle Gardner:
Nobody passes on a good flip that they already own. That's like mining gold in Alaska, bringing it to San Francisco and saying, "I can't do the rest, take it off my hands at a discount." All the hard work is already done.
They either know something that you don't or you know something that they don't(the only correct answer is if you know it's worth more than they think it is)
Otherwise you're likely buying fools gold. Given that I hear this story once per week with people doing their first flip... I'd steer clear
Kyle,
I really appreciate this feedback. After now looking at the property today and having my GC give me an estimate, the only thing I can think of is the profit isn't high enough to split amongst their partners for it to be worth the remodel? It's just me. They surely may know something I don't. There is a septic but we included an addendum so I should be covered there. The agent also let me know that they did buy it for much more but she didn't give me the figure. I didn't see your response until after I made an offer and went under contract this evening ha ha. 5 day inspection 14 day close. SPDS should be over tonight. After seeing the property today, I'm pretty motivated to do the remodel and rent it. Rent should cover on a DSCR loan with me getting my investment back. At this point only time will tell ha ha. Again, I really appreciate the feedback. I'll keep you all updated on the status.
- Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes1y
Yeah if the numbers seem ok then it could be worth it. Just make sure you're being conservative with the ARV. Now that you're under contract, it's probably worth getting a couple of second opinions on the value.
People that are capable of flipping don't leave money on the table though. It sounds like you're dealing with your average wholesaler. They'll say anything to get you to buy from them.
Anyways, wish you the best of luck. Get some second opinions on ARV from people who aren't financially vested in this deal. The rest is just math which you seem to have down.
- Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes1y
Also.... Assuming you're getting this in the PHX metro and arv around 240k... Sounds like you're getting a manufactured home or a condo. If that's the case, you need to look into whether this home can be financed after repairs.
A comp isn't a comp if one can be financed and the other cannot.
- Member since 2024 · 14 posts · 2 votes1ySingle Family in Casa Grande
Quote from @Kyle Gardner:
Also.... Assuming you're getting this in the PHX metro and arv around 240k... Sounds like you're getting a manufactured home or a condo. If that's the case, you need to look into whether this home can be financed after repairs.
A comp isn't a comp if one can be financed and the other cannot.
ARV $251k
Purchase Price $142k
Reno $60k
6 months holding costs but again I’m probably going to rent it so hopefully less than 6 months
All comps closed 2025, and are similar style home and year within 0.5-1.0 mile - Member since 2024 · 14 posts · 2 votes1y
Quote from @Kyle Gardner:
Also.... Assuming you're getting this in the PHX metro and arv around 240k... Sounds like you're getting a manufactured home or a condo. If that's the case, you need to look into whether this home can be financed after repairs.
A comp isn't a comp if one can be financed and the other cannot.
I guess if there’s some random $30k repair I don’t know about, I’ll chalk it up to a breakeven on this first one, remember everything I learned moving forward, get a tenant in it and move on to the next project 😂 I fortunately don’t need a paycheck so I’m not as pressured to flip
- Lender · Hackensack, NJ · Member since 2016 · 1k+ posts · 372 votes1y
That's what a due diligence period is all about!
- Member since 2024 · 14 posts · 2 votes1y
- Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes1y
Cool cool, Casa Grande makes sense. Wish you the best of luck. That makes sense to learn on the job. You don't always make as much money but learning on the job is valuable.
I think I found the house, I won't list it in case you want to keep it private. Disregard all of this if I maybe have the wrong house but it matches what you said. Comps are all over the place, active 210 to your east that isn't a bad house, much newer house cancelled at 270k to the west. 240k sold to the south but it's on a massive lot.
Also, the sellers on this house are wholesalers. They move quite a lot of houses. Don't buy what they are saying about not wanting to flip it cuz they're too busy or it doesn't make enough money. Or that they didn't buy it for 60k. They use realtors to sell their properties so that they're less likely to get in trouble for violating the code of ethics. Their realtor is telling you what she believes to be the truth. 40 days on market matches the week that they bought it. Not to say it's a bad flip but I'd bet money they got it for 60k. There's no intermediary party on the sale records.
Anyways, you'll probably be ok on this house. A lot of my subcontractors try and do flips on the side and get burned by wholesalers. So forgive my skepticism. We've flipped about 80 houses and wholesalers lie like it's going out of style. Doesn't mean that you can't make money on it, but don't trust anything that they say. Make sure to check everything multiple times. 60k seems about right for this remodel too. Did you get a sewer scope? Check the Roof? AC unit?
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Kyle Gardner:
Cool cool, Casa Grande makes sense. Wish you the best of luck. That makes sense to learn on the job. You don't always make as much money but learning on the job is valuable.
I think I found the house, I won't list it in case you want to keep it private. Disregard all of this if I maybe have the wrong house but it matches what you said. Comps are all over the place, active 210 to your east that isn't a bad house, much newer house cancelled at 270k to the west. 240k sold to the south but it's on a massive lot.
Also, the sellers on this house are wholesalers. They move quite a lot of houses. Don't buy what they are saying about not wanting to flip it cuz they're too busy or it doesn't make enough money. Or that they didn't buy it for 60k. They use realtors to sell their properties so that they're less likely to get in trouble for violating the code of ethics. Their realtor is telling you what she believes to be the truth. 40 days on market matches the week that they bought it. Not to say it's a bad flip but I'd bet money they got it for 60k. There's no intermediary party on the sale records.
Anyways, you'll probably be ok on this house. A lot of my subcontractors try and do flips on the side and get burned by wholesalers. So forgive my skepticism. We've flipped about 80 houses and wholesalers lie like it's going out of style. Doesn't mean that you can't make money on it, but don't trust anything that they say. Make sure to check everything multiple times. 60k seems about right for this remodel too. Did you get a sewer scope? Check the Roof? AC unit?
Man, I really appreciate all of that feedback. I'm assuming you found the right home based off of your feedback. It's tough to know someone got it for $60k a couple weeks ago and now I'm buying for $140k :) I want to get deals like that. I do have a 5 day due diligence period and will be meeting my GC there tomorrow. They're going to be taking a good look at the condition of everything. Maybe I should get on the phone with a couple inspectors and schedule some asap inspections. The roof looked good to me when I was out there and no noticeable leaks. AC blew cold. Didn't see any foundation issues and or anything else from the naked eye other than the water heater and insulation is probably at end of life
- Member since 2024 · 14 posts · 2 votes1yJust for my brain to process the way the psychology works for some wholesalers. As a follow up on your comment. Is it common for wholesalers to forego an inspector, that way they can defend themselves on the SPDS? As an example, they just buy the property with no inspections. Buyer comes back and says well we had a mold issue, termites, roots growing into the sewer line, foundation issues etc. Seller is able to say I didn't know about any of that because I purchased it sight unseen and had no inspections done.Therefore they're not liable. Thanks man
Quote from @Kyle Gardner:
Cool cool, Casa Grande makes sense. Wish you the best of luck. That makes sense to learn on the job. You don't always make as much money but learning on the job is valuable.
I think I found the house, I won't list it in case you want to keep it private. Disregard all of this if I maybe have the wrong house but it matches what you said. Comps are all over the place, active 210 to your east that isn't a bad house, much newer house cancelled at 270k to the west. 240k sold to the south but it's on a massive lot.
Also, the sellers on this house are wholesalers. They move quite a lot of houses. Don't buy what they are saying about not wanting to flip it cuz they're too busy or it doesn't make enough money. Or that they didn't buy it for 60k. They use realtors to sell their properties so that they're less likely to get in trouble for violating the code of ethics. Their realtor is telling you what she believes to be the truth. 40 days on market matches the week that they bought it. Not to say it's a bad flip but I'd bet money they got it for 60k. There's no intermediary party on the sale records.
Anyways, you'll probably be ok on this house. A lot of my subcontractors try and do flips on the side and get burned by wholesalers. So forgive my skepticism. We've flipped about 80 houses and wholesalers lie like it's going out of style. Doesn't mean that you can't make money on it, but don't trust anything that they say. Make sure to check everything multiple times. 60k seems about right for this remodel too. Did you get a sewer scope? Check the Roof? AC unit?
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Kyle Gardner:
Cool cool, Casa Grande makes sense. Wish you the best of luck. That makes sense to learn on the job. You don't always make as much money but learning on the job is valuable.
I think I found the house, I won't list it in case you want to keep it private. Disregard all of this if I maybe have the wrong house but it matches what you said. Comps are all over the place, active 210 to your east that isn't a bad house, much newer house cancelled at 270k to the west. 240k sold to the south but it's on a massive lot.
Also, the sellers on this house are wholesalers. They move quite a lot of houses. Don't buy what they are saying about not wanting to flip it cuz they're too busy or it doesn't make enough money. Or that they didn't buy it for 60k. They use realtors to sell their properties so that they're less likely to get in trouble for violating the code of ethics. Their realtor is telling you what she believes to be the truth. 40 days on market matches the week that they bought it. Not to say it's a bad flip but I'd bet money they got it for 60k. There's no intermediary party on the sale records.
Anyways, you'll probably be ok on this house. A lot of my subcontractors try and do flips on the side and get burned by wholesalers. So forgive my skepticism. We've flipped about 80 houses and wholesalers lie like it's going out of style. Doesn't mean that you can't make money on it, but don't trust anything that they say. Make sure to check everything multiple times. 60k seems about right for this remodel too. Did you get a sewer scope? Check the Roof? AC unit?
So they're basically just going to answer NO to everything on the SPDS right :)
- Member since 2024 · 14 posts · 2 votes1y
Quote from @Kyle Gardner:
Cool cool, Casa Grande makes sense. Wish you the best of luck. That makes sense to learn on the job. You don't always make as much money but learning on the job is valuable.
I think I found the house, I won't list it in case you want to keep it private. Disregard all of this if I maybe have the wrong house but it matches what you said. Comps are all over the place, active 210 to your east that isn't a bad house, much newer house cancelled at 270k to the west. 240k sold to the south but it's on a massive lot.
Also, the sellers on this house are wholesalers. They move quite a lot of houses. Don't buy what they are saying about not wanting to flip it cuz they're too busy or it doesn't make enough money. Or that they didn't buy it for 60k. They use realtors to sell their properties so that they're less likely to get in trouble for violating the code of ethics. Their realtor is telling you what she believes to be the truth. 40 days on market matches the week that they bought it. Not to say it's a bad flip but I'd bet money they got it for 60k. There's no intermediary party on the sale records.
Anyways, you'll probably be ok on this house. A lot of my subcontractors try and do flips on the side and get burned by wholesalers. So forgive my skepticism. We've flipped about 80 houses and wholesalers lie like it's going out of style. Doesn't mean that you can't make money on it, but don't trust anything that they say. Make sure to check everything multiple times. 60k seems about right for this remodel too. Did you get a sewer scope? Check the Roof? AC unit?
So SPDS is sort of a joke in the world of real estate investing SMH. Just received their SPDS. No to everything ha ha... what I suspected
- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Bid deeper.
Discount their lack of clarity, and assume something you're missing. Don't be forgiving, that is just reckless.
- Member since 2024 · 14 posts · 2 votes1y
Quote from @V.G Jason:
Bid deeper.
Discount their lack of clarity, and assume something you're missing. Don't be forgiving, that is just reckless.
Yes, I agree. Thank You for the reminder
- Member since 2022 · 14 posts · 11 votes1y
Hey David, this is a great question. I too am in the PHX market and have been an active wholesaler for the past 25 years in this market. I think all of your questions are very natural and valid. The difficult thing is that you will most likely never know the actual answers. These sellers may have gotten in over their heads. Maybe they have too many projects going. Maybe they just got such a good deal that they wanted to double their money selling to you. What is important is that you do your due diligence on the property. If it is your first deal, hire a property inspector so that you can avoid most, if not all, of the potential surprises. Double check your comps and make sure you are comfortable with the resale for the property. And, then double check and triple check how much your repairs will run you so that you can make sure your exit is a profitable one. Once you have checked all those boxes positively, you can move on with confidence.
- Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes1y
Yeah pretty common with the spds. I've been a part of about 5 where we had proof that they knew something and lied about it. Showed them the proof of them lying and they either called and begged us not to report them or denied it and quit answering our calls. It's a lot easier to hold the seller responsible if they're also a realtor.
But, I doubt these specific guys got an inspection. It's a numbers game for them. Buy low enough and they'll never lose. I agree with the other comment though. You need to get them to drop price during your due diligence. List items that are non negotiable, ask for 30k that you didn't plan for.... Decide what's right for you
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes1y
All good advice . But remember you make your money when you buy . Get your inspections and tell them you could still be interested , but there is more work than they described , offer $100K . Tell them to get back to you and let you know , give them 2 days . Tell them you are doing another inspection on another off market house , and leave it at that . See if they bite .
- 1yStephen MoralesBusiness MemberJacksonville, FL · Member since 2025 · 402 posts · 205 votes
Quote from @David Gillette:
Good day everyone. Just starting listening and learning from Bigger Pockets recently. I’m looking to take down my first fix and flip project but have a question before I submit my offer
ARV is $251,000
The home was purchased from some investors earlier this year for $60,000. They’ve accepted my verbal offer of $142k. They purchased it to fix and flip but decided to sell and move on. My question is why would they want to move on? Could they have found a major issue? Are they afraid of the market conditions? Do they just want to cash out? Why wouldn’t they finish the project themselves? It’s become a bit of a red flag issue for me and I’m hesitant to move forwardThank You for your time
I've been in the space for almost 10 years now and I can say I will do a quick sale and make quick profits ANYTIME over having to rehab a property and put it on the market. Their mindset is all about speed. Move on to the next transaction especially if you can profit without having to take additional risk (rehabbing the property and listing it to aim to get market value). I would also say with what's going on is probably a mix of market conditions and the fact that they can make a sizeable profit without having to do anything.
This is your first flip, when you are looking at future deals DO NOT think about how much the other party is making, that is a limiting mindset. WHO CARES. The real question is...are you getting a good deal at the price you are paying?- 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Stephen Morales:
Quote from @David Gillette:
Good day everyone. Just starting listening and learning from Bigger Pockets recently. I’m looking to take down my first fix and flip project but have a question before I submit my offer
ARV is $251,000
The home was purchased from some investors earlier this year for $60,000. They’ve accepted my verbal offer of $142k. They purchased it to fix and flip but decided to sell and move on. My question is why would they want to move on? Could they have found a major issue? Are they afraid of the market conditions? Do they just want to cash out? Why wouldn’t they finish the project themselves? It’s become a bit of a red flag issue for me and I’m hesitant to move forwardThank You for your time
I've been in the space for almost 10 years now and I can say I will do a quick sale and make quick profits ANYTIME over having to rehab a property and put it on the market. Their mindset is all about speed. Move on to the next transaction especially if you can profit without having to take additional risk (rehabbing the property and listing it to aim to get market value). I would also say with what's going on is probably a mix of market conditions and the fact that they can make a sizeable profit without having to do anything.
This is your first flip, when you are looking at future deals DO NOT think about how much the other party is making, that is a limiting mindset. WHO CARES. The real question is...are you getting a good deal at the price you are paying?In other words, they're flipping and making profit versus realizing the risk of rehabbing the house into a very probable falling knife market in Q3-Q4.
I wouldn't recommend ignoring their motivation, I just would really prioritize making sure you understand what you're getting yourself into.
Again, bid very deep. This is exactly the case of a falling knife. You may end up the textbook definition of it.
- Real Estate Agent · CA · Member since 2025 · 15 posts · 11 votes1y
Hey David — I ran into a similar situation while looking for deals. Found a property that had been purchased by another investor, then listed on the MLS just three weeks later. I spoke with the agent and they told me the original buyer backed out because the rehab was going to be over budget.
Just a heads-up — a lot of times when investors walk away, it’s due to hidden repair costs that aren’t obvious up front. Things like foundation issues, electrical, or plumbing problems can sneak up fast. If you’re still considering the deal, definitely do a full inspection and bring a contractor if you can.
Also, as an agent, I’d say be extra cautious you’re not getting played by the listing side. Make sure you get all the disclosures and go through them thoroughly. Sometimes things are left out or glossed over — don’t be afraid to ask questions and dig deeper.
Best of luck with your first project!
- Investor · Mississippi Gulf Coast · Member since 2019 · 55 posts · 53 votes1y
This is your opportunity to lower your offer. As has been pointed out several times, wholesalers are in the churn and burn game. Its not a bad game to play, its just very different from the flip game. For wholesalers, the less they have to invest, the better cause they are just moving on to their next opportunity.
As a flipper, you will be committed to delivering something that you can stand behind because guess what... you will have to stand behind anything that you do or discover along the way. If this is a winner, but could eat up another 30k, bid down 40k. Material costs are going to skyrocket in the next few weeks. Dont worry about the wholesalers, they will churn their profit anyway. In fact, let them know you will want to do more and have them feed you future opportunities... but due diligence is a great time to get that price lowered.
Make it happen. Dont settle for being a nice guy your first time out.
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