BP Podcast 173: Flipping 100+ Houses in an Expensive, Competitive Market with Steve Jones

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House flipping can be incredibly profitable and fun — but for many people, trying to make it work is next to impossible because of the high cost of homes. That’s why on this episode we’re excited to chat with Steve Jones, a house flipper from Southern California who has flipped over 100 deals in his neighborhood. Steve’s advice is rock solid for anyone looking to grow their real estate business — and you are going to love his advice about open houses. Steve’s perspectives just might change how you do real estate forever.

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In This Episode We Cover:

  • Thoughts on investing in Southern California
  • How Steve got started in real estate
  • The first home he flipped
  • What exactly a “condo conversion” is
  • How he’s done over 100 flips so far
  • How Steve finds his deals
  • What you should know about looking for hidden value
  • Steve’s formula for evaluating a deal
  • How he flips a deal
  • What he typical spends on a normal rehab
  • The worst flip he’s ever done
  • How to think with the buyers in mind
  • Tips for getting an A-team contractor
  • How to learn from contractors
  • The importance of developing a thorough scope of work
  • Why deals are relationship based
  • How to calculate land value
  • What happens when people lose their money
  • Things that he loves about flipping houses
  • The “slow flip
  • Becoming an expert on your neighborhood
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “We always bring the indoors outdoors — and bring the outdoors in.” (Tweet This!)
  • “You have to have an appetite for risk.” (Tweet This!)
  • “Your best price is always going to be your first price.” (Tweet This!)

Connect with Steve

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 80,000 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!

21 Comments

  1. Tom Leonard

    This was great episode – thanks for talking about how you can be successful here in Southern California. I recognized all of those neighborhoods Steve mentioned and made it seem more real. Sometimes it is tough to relate to strategies where you can buy entire houses for the price of a new Lexus. The two things I learned was that it can take a few months – not days – to complete the transaction. And that focusing on the end buyer can improve the way to approach the deal. Really good. Thanks for posting.

  2. Roy Kwak

    Steve, thanks for doing this awesome interview. I surf and I buy houses and it is cool to see someone who has not only incorporated the counterculture aesthetic that pervades the surf industry into beautiful flips but has been doing it for so long and with such volume. Based on your instagram, it is obvious that you have uniquely trained eye that has provided the DNA for your inspiring flips.

    I live in NELA so I have seen the results of what you have done up here and I also see that there are many emulators in the market. You mentioned in the interview, estimating future market value. Do you think that these neighborhoods (Highland Park, Eagle Rock) can still be profitable based on your model given all the price appreciation that has happened in the past few years? The numbers seem sort of out of whack to me because rehabbed places in Eagle Rock are going at similar per square foot prices as South Pasadena (which has a MUCH better school system and more established shops/businesses for young parents (who are presumably the end buyers for these flips)).

    • Steve Jones

      Hi Roy, thanks for the nice comments, I appreciate.
      I do think that NELA still has a way to go in terms of appreciation….at least I hope so!
      I just bought a place in Hermon and it seemed like a deal to me.
      Hope to see you at Cafe de Leche one day!

  3. Vanessa Ryder

    The Steve for an AWESOME interview..!! One question though, you mentioned how there are 20+ offers on some properties (all to common here in LA!), and I would LOVE your input on how you (or suggestions to us how to) get them.. I have had some bad experiences with agents making side deals etc… Any advice?

    • Steve Jones

      Hi Vanessa, thank you!
      As far as getting the house with so many offers you have to make sure the listing agent knows you are going to CLOSE and that it will be SMOOTH.
      Fortunately for me many agents do know me and they know that I close, so that helps.
      If you are working with a hard money lender, have the lender call the listing agent and let them know that you are in good standing and they love the deal, etc. That helps too.
      You want to make sure your offer gets presented to the seller, make sure that happens and stipulate that somehow as well.
      There is always an advantage for an agent to rep both sides as it results in a higher commission…many people are getting wise to how unethical that is and many brokerages are taking steps to ensure the process is more fair.
      I hope that helps!

  4. Catherine Decker

    I loved this interview. I think it was my favorite one to-date. I think Steve’s philosophy especially spoke to me. He described wanting to improve every area that they touch, and that’s what I want to do. I especially have a love older homes and the craftsmanship and materials that were used. I want this to be a niche where I can specialize as well. Currently, I am rehabbing a fabulous Victorian house in Sacramento. It’s a HUGE project, and I’m excited to have heard Steve’s interview just as I close the deal. I was inspired and plan to re-listen. Also, have checked out the better shelter.com web site and my compliments. Beautiful work.

  5. Justin Hennig

    Steve,

    Great episode. I love how you build offices into garage stalls for added value…that’s really smart with people trending to remote work arrangements these days!

    Curious if you’d be willing to share an actual scope of work from one of your flips…one of the most valuable nuggets from the episode is the part when you explained how a high amount of detail seems to solve a lot of problems with contractors, keep budgets in line, and of course maximize profits.

    That being said, what have you refined this level of detail in the Scope of work to be?

    Thanks again for sharing your insights with the BP community!

    • Steve Jones

      Hi Justin, glad you liked, I can’t share my scope but there are lots of templates online you can start with.
      Walk with 3 contractors and add/amend scope each time you walk it.
      By the 3rd time it should be pretty comprehensive.
      OK to have a photo library as well to illustrate what you are looking for.
      I hope that helps!

  6. Sean S.

    Steve,

    How are you financing the deals, if at all? Based on the higher price of the acquisitions you do are you typically paying all cash for the acquisition and rehab work or financing some of it? Are you personally guaranteeing any loans and if so, how to do feel about that?

    Great interview and thanks for all the insights.

    Sean

    • Steve Jones

      Hi Sean, I use typically use hard money!
      And of course I am on the hook for everything!
      I don’t like it but what can you do, I think hard to borrow money without a personal guarantee?
      However as I am throwing money into all my deals it makes paying back the hard money easy as they get paid back 1st.

      • Braden Hobbs

        Steve,

        This was a great episode for me. I am very conservative in my analysis of deals, but this opened my eyes to ways you can add value to make deals work. Thanks!

        Would you mind elaborating on your structure to the financing of these deals? It sounds like you use multiple investors, so what’s your payment structure? Does each investor just get their money back at the end, plus an interest %? Or are you paying monthly?

        -Braden

  7. Lorene Fleming

    Steve, what a great post! Being in So Cal, it is easy to think there is nothing here, prices are too high to really make a profit, etc, all kinds of reasons to not actually get started. I like the idea of value added, so often we hear to get properties that need minimal work to flip, but I’m not sure that works here in So Cal, because it seems like everything is multiple offers for that type of property. Thank you for opening my mind to a different way of thinking about rehabbing.

    Brandon and Josh, all of your podcasts are inspiring, but because this one is so close to home for me, it is truly pushing me to get started! It strips away one more excuse to take the leap! Thank you once again for a great podcast and as a side note, make sure everyone gets the checkered shirt memo next time!

  8. Bevla Reeves

    Awesome podcast Steve! Just what I needed to stay inspired to continue looking for deals in my expensive market!

    Thanks for talking about the funds needed to flip also, not enough discussion on how much money it takes and where investors get the money to get started! 😉

    …and your flips are gorgeous!!!

  9. Julie Marquez

    Hi Steve! Great podcast, I just finished your interview and I really enjoyed it. I love the branding that you do with Better Shelter, I think it’s so important to establish a reputable brand name for your product, and Better Shelter says it all. When in your real estate game did you develop your brand? Was it at the beginning or later?

    You said that you helped design stores for Quiksilver, were you a part of their construction/real estate division? I am sure that background helped a lot for you consumer oriented flips. I’d like to think my construction management background will help me out in real estate investing, though the safely of my real job keeps me there before I jump all in. Thanks for all the insight, you definitely gave me a lot to think about!

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