If you want to become a legitimate house flipping “fix and flip” specialist, be prepared for an onslaught of criticism when you declare to the world what you do.
When I first started my house flipping website, I have to admit that I wasn’t completely confident in promoting myself to the world as a “house flipper”. Although house flipping is what primarily generates income for my business, I do a lot of other kinds of real estate investing as well. But when I chose the name for my website, I was very reluctant to lump myself in with all the negative connotations associated with the phrase “house flipping”.
I think most of us real estate investors are aware that banks and the government are not particularly fond of people who flip houses. The sad part is because house flipping has received so much criticism, it makes being a house flipper a bit of a challenge.
So what can you do about it if you’re a legitimate house flipper?
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
The Negatives of House Flipping
To take the complete opposite side of the argument, I do believe that house flipping does indeed warrant some justifiable negative criticism. As with any industry, there are always going to be a few rotten apples in the bushel – so to speak. In the real estate investing world, we certainly have our fair share of scoundrels. There are far too many gurus have made boatloads of money using predatory tactics to both build scammy real estate investing businesses as well as lure new real estate investment students to purchase expensive empty coaching programs.
We all know who many of these people are. Just Google “real estate investing scams” and you’ll see nearly 3 million results.
The house flippers who particularly give the house flipping name a black eye are those who buy a distressed property, barely do anything to improve the value of the property, then turn around and “flip” it to a buyer. That buyer invariably needs to put in tens of thousands of dollars of work to make the house livable. This is more like brokering junk than flipping houses.
In other cases, some house flippers buy a distressed property, do some cosmetic fix ups to “put lipstick on a pig”, don’t divulge all the known issues with the house and then sell that house for a quick profit. However lucrative this kind of “flipping” might be, I can’t imagine that those guys sleep all that soundly at night.
Fix and Flip, Rehabber, House Flipper?
So when I named my House Flipping School, the name came with some risks associated with it. In fact, many house flippers have transitioned away from the house flipping moniker by referring to themselves as “rehabbers”, “fix and flip specialists” and “residential real estate developers” – so I felt like I was swimming against the current.
In retrospect, I suppose I could’ve done the same thing as they did – although “Residential Real Estate Developers School” doesn’t exactly flow off the tongue very easily…nor would anyone be able to type in the URL correctly…
So when I sat down with my partners, we had a tough choice to make. We could either give into the pressure from the media, other real estate investors, many of our peers, local banks…you name it – and completely ignore the “house flipping” word altogether.
Or we could take a stand and do our best to repair the reputation of the word itself.
We chose the latter because its simple: house flipping is what I do. If you want to get really technical, I guess I am a “fix and flip specialist”…but that just doesn’t sound right. But it is what I do as a business.
We debated this topic endlessly and I believe we made the right, albeit unpopular choice. At that time I was particularly concerned about being grouped in with all those unethical flippers. I really struggled as to whether or not this was a smart branding decision. But after nine months – I realized that there is a serious re-branding opportunity here – not just for me, but also for all those legitimate house flipping professionals who do good and ethical work.
What the Legitimate Fix and Flip House Flipping Specialist Does
Because house flipping has a negative connotation to begin with, anything with the house flipping term attached to it seems to instantly gain some level of attention. There is some self-serving purpose to this as well, though. If you tweet something that includes the keyword “house flipping”, we have noticed that you get more eyeballs on your content than just “real estate investing”.
As anyone from Lady Gaga to Donald Trump knows, stirring up a little bit of controversy isn’t too bad for your personal brand. And especially now, in the age of social media. So in the spirit of full disclosure, we made the decision to brand ourselves as house flippers with that aspect factoring into the decision.
But aside from the self-serving “controversial” aspects of the word itself, I honestly felt that with many other house flipping pros that do good and legitimate work on their flips, we could collectively change the perception.
And there are many reasons to be very proud to be a house flipper. There is just such a huge opportunity here for honest house flippers to change the public’s perception of people who flip houses and make money at the same time. In reality when I “flip” house, I will help to improve the neighborhood, as well as the local community. This makes me feel really good about what I do.
If you can find something that you’re passionate about, love doing, help people and make money doing it – and a lot of it in many cases, isn’t that what life is all about?
Sure, friends, family, on the other parts of life are important – and I’m not trying to discount those at all. I’m talking about your professional life. If you’re proud of what you do, can help people and run a profitable business doing it, it’s the best feeling in the world.
Here are some examples of what I’m alluding to:
- Legitimate house flipping brings taxes back to the community by improving home values and expanding the tax base.
- Legitimate house flipping puts people to work – plumbers, electricians, general contractors, subcontractors, interior designers…the list goes on and on. We employ dozens of these people to give them gainful employment.
- Legitimate house flipping generates income for local lumber yards, supply shops, local businesses – I can’t even fathom the amount of money I’ve invested in materials for my house flips over the years. It must be in the several millions of dollars.
- Legitimate house flipping increases the home values of entire neighborhoods. If you completely renovate a totally rundown house in a neighborhood, what neighbor wouldn’t be happy with that? They know that the value of their home has now improved because of your work.
- Legitimate house flipping creates beautiful homes at affordable prices and improve the lives of the people who inhabit the homes we fix and flip.
Here at BiggerPockets, there was a study done on the value of real estate investing in its overall impact on the economy of the United States. I highly recommend you check that out. Although house flipping is not the only type of real estate investing which adds to those numbers, it certainly plays a significant role.
What Legitimate House Flipping Is Not
The biggest misperception people have about house flipping is that it’s all about a “get rich quick” scheme to scam unsuspecting home buyers. Sadly, many of the guru programs that are out there sell courses based upon this premise. And many of these people have sold millions of dollars of courses based upon this idea.
I’ll be the first to tell you though that making money flipping houses is anything but a get rich quick scheme. If it were, then everyone would be doing it. Trust me, it’s not. It’s taken me nearly five to perfect the system and formula I routinely use to fix and flip the houses I work on.
Yes, there are simple steps to house flipping – but it’s like a calculus textbook wrapped in a comic book cover. To get people interested in house flipping, you definitely need to teach them through simple means. The steps are simple, but all the work behind the “simple” steps are anything but.
The difference is that I tell everyone who gets it that although the name is simple, the process itself is not simple – but you have to start somewhere in your education. After that, experience is your greatest teacher – as long as you keep learning while you’re doing.
House Flipping Conclusions
So the next time you overhear someone bashing house flipping or read about another real estate investment scam, try to keep in mind the benefits of house flipping listed above. Because if you are serious about becoming a house flipping professional, you can certainly do it through legitimate and ethical means while helping your family and improving the community in which you do business.
If you’ve read this far, please leave a comment below! What do you think – is house flipping a bad word? Is it a good word? Have the scammers ruined it all for us? Please leave a comment, I’d love to hear what you think!