What is your definition of "flipping" and "rehabbing"?

4 Replies

I was at a recent REIA meeting and someone asked what I did. I told him that I was currently rehabbing a house. I try to avoid using the term "flipping", especially with so-called investors savvy types, because it seems to mean different things to different people. A woman overheard me say that I was a rehabber and then asked, "So you're a contractor?" I said, no I was a rehabber. She then looked extremely puzzled and asked "What's the difference?" I told her the difference is that I own the property and I am the one taking the risk. We went back and forth a bit before I gave up and said I needed to use the restroom.

To me "flipping" means acquiring property and then selling it at a profit. This could mean turning around and selling it two days later as a wholesale deal, pre-habbing, or a full blown rehab. A flipper always has the option of doing any of these things and might choose to do so for whatever his reasons. The term "rehabber" seems pretty straightforward to me. I can see similarities between what a rehabber does and what a general contractor does but I would think a GC would say he was a GC if asked what he did. It's also possible that someone could call himself a Flipper and he is correct, although it would be more precise if he said he was a Wholesaler.

Am I off base here? How do you define and distinguish between those terms?

Originally posted by @Kevin Barnett :

I was at a recent REIA meeting and someone asked what I did. I told him that I was currently rehabbing a house. I try to avoid using the term "flipping", especially with so-called investors savvy types, because it seems to mean different things to different people. A woman overheard me say that I was a rehabber and then asked, "So you're a contractor?" I said, no I was a rehabber. She then looked extremely puzzled and asked "What's the difference?" I told her the difference is that I own the property and I am the one taking the risk. We went back and forth a bit before I gave up and said I needed to use the restroom.

To me "flipping" means acquiring property and then selling it at a profit. This could mean turning around and selling it two days later as a wholesale deal, pre-habbing, or a full blown rehab. A flipper always has the option of doing any of these things and might choose to do so for whatever his reasons. The term "rehabber" seems pretty straightforward to me. I can see similarities between what a rehabber does and what a general contractor does but I would think a GC would say he was a GC if asked what he did. It's also possible that someone could call himself a Flipper and he is correct, although it would be more precise if he said he was a Wholesaler.

Am I off base here? How do you define and distinguish between those terms?

Do you intend to sell the house that you are rehabbing for a profit? If so then you are considered a flipper as well as a rehabber - same difference. The only thing that might get you out of the flipper title is if you choose to do lease/option for a year or so on most of your purchases; maybe just be a landlord altogether still buying fixer-uppers for the purpose of renting out immediately after rehabbing.

Maybe you don't like the sound of the word 'flipper' - could remind you of that cute little dolphin at the aquarium.:-) You must have been called (compared to) worse before...  

Kudos,

Mary

@Kevin Barnett , so as a "Rehabber", how are you generating income for yourself? If you say, "Oh, I will be selling the property for more than I have put into it", then I am sorry to have to be the one to tell you - you're a Flipper!

Anyone who on-sells for profit WITHOUT rehabbing is a Wholesaler.

Perhaps the only people who should say they a Rehabbers by profession are those who still keep their properties after the rehabs (and just live off the Rents). Are you one of those? Welcome to BP. Cheers...

I always associated "flips" with a formulaic, fast turnaround of a fixer into something better/more marketable and contemporary. And "rehabs" are more restoration work (rehab = rehabilitation).  Both would, I would assume, be for profit (unless some non profit was restoring a historically significant home/building). Flipping sounds faster than rehabbing to me. 

I also associate flipping and rehabbing with fixing up the property. If nothing is done to the property but a profit is made, then I consider that wholesaling or ___ (something other than flipping). 

Just my take on the two terms. 

I've rehabed numerous homes that I've kept as rental properties and from the beginning on these, the intention was to hold long term and rent. I'm starting to sell a couple (just sold one this month) and am also buying more to fix up with an intention to sell as I now have enough for rental income. Flipping to me is buy, fix up, sell quickly (8-12 weeks) and move on to the next one. My definition of Rehabbing is buy, fix up, get renters, season for at least a year so it fits into capital gains and then possibly sell. I also mainly deal with duplex/triplexes versus SFH.

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