Can’t find profitable fix and flip

Rehabbing & House Flipping
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Can’t find profitable fix and flip

Steven Barr
Atlanta, GA · Member since 2021 · 163 posts · 58 votes

I have been flipping properties for 2-3 years and have done a fair amount of deals. All profitable 

I have 7 houses for sale right now and having some trouble selling them with this market slowdown

Meanwhile, I have been trying to find another deal for the past several months. I’ve probably looked at 200-300+ deals (wholesaler deals, agent deal, on market, etc) and all of them either lose money or break even. It seems as if the market has dropped, but only on the sell side, not the acquisition side. I’m not trying to be greedy and ask too much on discounts for the flips, I am literally just trying to find something profitable

My question is…. Is everybody else having this same problem? Am I in too competitive of a market (Atlanta, GA) bc there are actually people still buying these deals and ridiculous prices? Do I just not have the right people in my network?


Thanks for the insight!


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Ronnie C.
Real Estate Investor · Middle TN and Southern KY · Member since 2014 · 72 posts · 26 votes
2y

I'm on the verge of completely giving up!! I can't retire, refuse to work for someone else,  but I do have cash built up (Thank GOD), and a 850 Fico across all the Credit Bureaus. The reason I don't have more cash is thanks to a former business partner and 5 years of litigation. I got back a drop in the bucket and have been trying to rebuild ever since. Hence why I say, "the only ship that don't float, is a partnership!!"

I need flips IN VOLUME to build cash and have money to live on. Rentals can't do that!!! 

I quit building last year (slow market/high rates) and have been trying to find a flip for quite some time as they seem to move rather quickly on the market surprisingly. All I come up with are so called "wholesalers" with not even a marginal deal. Back in the day when I started flipping 18 years ago it was 70% of ARV minus repairs minus wholesale fee. These wholesalers TODAY are either clueless on rehab cost, real ARV and/or people are actually overpaying, which I have seen that quite often on MLS. (I have TN re license)

Example: A Realtor (roll on floor laugh my butt off) paid $180,000 for a house last year that might go for $250 ARV today! 5 months and at least $40k minimum later she list it at $265k (still laughing) it closes at $245K cause it wouldn't appraise! It's not a Christian thing to say but I hope that all these people out here not following the 70% rule, or people overpaying for rehabs choke on it!

I have been hopeful in finding a deal out of state as I have a Realtor in that area that believes I can find the on market deals i'm looking for. Problem is finding a investor friendly GC in that area. I've spoke to 1 I like so far but Would like to have others on my team as well. I'm kinda doubtful in finding on market deals there though and don't want to waste the Realtors time even though he thinks it can be done. 

The internet, gurus-advertising constantly in reels feeds, and TV shows has killed this industry. 

Now useless NAR settled in that dumb lawsuit that they should have never lost and that's just going to add to more problems in the real estate market. If it ain't broke, DON'T FIX IT!! All the buttholes suing and their copycat suits are basically suing McDonalds for hot coffee!!! This is going to add to more trouble in the markets.

I don't see how I can make it any longer, I keep asking God to open a door for me.

Meanwhile, I keep practicing "Welcome to McDonalds, may I take your order please!"

Maybe I can get a door greeter job at Wal-Mart?

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  • Steven Barr
    OP
    Atlanta, GA · Member since 2021 · 163 posts · 58 votes
    2y
    Quote from @Kevin Marshburn:

    I respectfully disagree with Paul above. Of course, slap and list plays, where it's a few cosmetics updates and re-listing properties mostly as-is was the strategy for some, and in those cases they are priced out of the market now for reasons he stated. BUT, for flippers who take inventory that cannot be sold as-is, requiring large updates and investments to become livable and desirable, that is massive value. It creates inventory on the market that wasn't there before and increases surrounding home values in the process. 

    The process and numbers can still work, it's just harder to find deals... 

    @Kevin Marshburn I disagree as well which is why I didn't respond. You either go luxury reno for top ARV or basic reno for lower ARV. But the reality is that the rehab itself is the least important part of the flip. It's all about what price you buy, and every flipper knows this

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  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    2y
    Quote from @Ronnie C.:
    Quote from @Steven Barr:
    Quote from @Ronnie C.:
    Quote from @Steven Barr:
    Quote from @Ronnie C.:
    Quote from @Shayne Mitsuuchi:

    What are you looking to make on a fix and flip? How many properties are you typically underwriting on a given day?

    If you can't make a minimum of $45 grand on a deal, it's not worth it!!! I can/could easily make that off a new spec house and more. Unless you are turning in volume 10-15 or more houses a year.  I could turn 15 plus rehabs a year! But i've been struggling for almost a year to get 1 deal! $10-$20 grand on a deal is pathetic and not worth my time! Heck, you gotta pay taxes on it too, and you also run the risk of the unforeseen and problems along the way with a rehab.

    Lets see, I paid my fees and got back on MLS last May, and signed up for Privy. Did nothing for 3 months straight but sit at this computer looking at potential on market deals and crunching numbers!

    Now I just call or text agents and say hey, I'm a flipper, before I spend time and travel to go look at this listing, how flexible are your sellers? It's not worth the 1/2 hour to hour trip (one way) to go look at a potential deal, then crunching numbers, then spend another hour on all the paperwork required to submit an offer in writing on a MLS deal.

    I also used Jerry Nortons "Flipster" last year for the free trial period! What a joke! If you are wanting to take the time and expense to mail people, I'd spend DAYS scrubbing list of people to mail to. If they haven't owned the house for 15-20 years (with a mortgage) then they aren't gonna have enough equity for you to buy it as a flipper. So i couldn't depend on Flipster, and the comps for on market properties or even an off market address I ran through Flipster was WAY-OFF. Nothing beats MLS and training from a broker who'd been in the business 20 years, and partial training from an appraiser, and this was 22 years ago. I had to school a so called wholesaler last week on his comps, lol!

    I also tried Property Radar for a trial period in this time as well. Nope.

    I stopped doing mailers, cold calls, etc back in 2007 and relied on MLS. I always got my deals and best deals from MLS or wholesalers who used the proven formula of 70% of ARV MINUS REPAIRS MINUS WHOLESALE FEE.

    I found out the hard-way my 1st year that 10s of thousands of dollars or all the time out of my life trying to save money and do it myself was not worth it to maybe get 1 deal trying to buy direct from owners.

    Best of luck to ya :)

     @Ronnie C. why were you unable to turn 15 specs in a year? Or am I misunderstanding?

    You misunderstood :). I AM able to turn more than 15 rehabs a year, "IF" I could find the deals! I haven't been able to find a deal. 

    @Ronnie C. not rehabs, specs. Are you unable to find spec deals as well?


     Building lots are getting harder and harder to find! However, I know where I can still get them. The reason I stopped building new spec houses is because the market and the high interest rates. New construction in my area is sitting on the market 200-300 days going no where! 

    But they will buy an older, cheaper,  rehabbed house in a heart beat. 


     our market is the opposite. in the last 2 years existing inventory went down by 10,000 units in columbus from it's peak in 2021 and new construction went from 1/19 houses to 1/11 houses sold. new construction is on fire here. 

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