Flipping Q&A: The Fun Stuff

This will be the last 3rd of the Flipping Q&A for now.  In cased you missed them, we already talked about getting the flips, and renovating them.  Today's questions are a bit more personal. What is your greatest challenge when it comes to flipping?

I am, lol.  Seriously though, it's figuring out my limitations.  What do I have time to really do?  What can I handle on my own?  What can't I handle on my own?  And how can I do this all without getting burnt out?  That last one is the biggie.  Still haven't perfected that one, but I'm working on it.  The design aspect of these houses is the easy and fun part for me, it's the project management part that I still need to work the kinks out of.

What is the best part about flipping?

The best moment is when the room comes together and everyone else gets to see what's been floating around in my head.  I visualized the end result from the beginning so I love it when I finally get to share that.  'See!  That's why I made all these decisions that you thought I was crazy for!  Because I knew THIS would be the result.'


You spend so much time and energy on these houses, isn't it sad to see them go?

Surprisingly no.  I renovate them with the buyers in mind, not for myself so it doesn't feel so personal.  I stand behind every single thing I do to my houses, but if it was my own house, I would definitely be throwing more color everywhere and spending a few extra bucks to make it perfect for exactly how we live.  I do get a bit melancholy when I drive away for the last time and drive by occasionally to make sure the houses are being loved.  That being said, though, once I finish the houses, I just want them gone.  After my renovations are done, I just worry about all the minutia until the moment we close and breathe a huge sign of relief when the deal is done.

What would be your dream project?

My dream project would be our next house.  We'll see what the reality is when it comes time, but Hubby and I have grand dreams of getting a fixer-upper Victorian and renovating it to the nines.  All the mechanical systems would be brand new and I'd work my magic and go picking and treasure hunting for a lot of the finishes to make the house truly special.  Victorian houses are what lead me to fall in love with design in the first place and I've always wanted to own one.

Is this experience what you’d hoped it would be? What has surprised you the most so far?

I have no idea what I expected going into this, but I don't think I could have ever expected what it's turned into.  I think what's surprised me the most is how personally invested I get into the projects.  Not just hours (which are many more than expected), but how much pressure I put on myself to get every detail right.  It is grueling, which is apparently why my own house doesn't get any attention these days, but it's more than a little fun to take a house that no one even looked at before and elicit a 'wow' reaction.


And here's the doozey of a question:

Are you happy you made the switch from a regular 9-to-5 gig to your new adventure? Is there anything you miss from your old life? Is there anything you feel you’ve gained in your new life?

I've never regretted quitting my 9to5.  I felt like I was just a cog in the machine and now I get to have a bit more impact.  Even if it's only an impact to the family who is so excited to be buying one of my houses.  Don't get me wrong, I worked for a good company and the commercial architecture and design industry can be pretty neat at times- it just wasn't for me.  I do miss the regular hours (and not thinking about working almost every waking moment) and I miss the people.  Emphasis on the people.  I miss the individuals I left, but I also miss the daily interactions.  There are many days where I'm at the flip and on my own for the entire day.  By the time I get home, I want to chat Hubby's ear off and with the poor guy in sales, talking all day, he yearns for quite at the end of a long day.  Even though some days are trying, I think I've gained everything from my 'new life.'  Not only do I have the flexibility to work my own schedule and the projects that I want, I've regained my 'self' that I seemed to lose in my old career path.  Finding myself and my passions again is worth the near panic attack I had when giving my 2 weeks notice.  It's worth the late nights I put in when I'm trying to rush to get a house listed.  It's worth the literal scars I have from renovating, and it's worth being covered in paint and demo dust for months because now I feel like I'm headed in the right direction.


Wow, ok, ended up baring a bit more there than anticipated, but I told you I'd answer the flipping questions you really wanted to know!  Thanks for all the questions submitted- I hope I answered as many as possible!

Have a wonderful  holiday weekend!


Flipping Q&A: Renovating

After we talked the basics and how I go about getting my flips, I figured the next logical step this week is how I actually go about renovating them. Do you use the same contractors for each flip?

This has been an evolving process, but I try to.  As I find contractors that I like working with, they get brought back to the next project.  For example, my plumber has worked on all 4 flips, my electrician on 3, and my contractor and flooring guy on 2.  If I like you, not only will I use you again, but I'll recommend you to friends and clients (as long is it doesn't get in the way of my flips ;-) ).  Here's the toughest part- HOW do I go about finding people I like and trust?  Recommendations are always the best place to start.  I've found that while, friend's and family recommendations are a great jumping off point, getting recommendations from other contractors is even better.  They'll only keep working with people who they trust and do good work, so if they give their stamp of approval it has a bit more weight.  My plumber recommended my electrician, and my electrician recommended my contractor.  This isn't fool-proof, no way is, but it's been my best way of finding new talent so far.  If I have a project that I need a new contractor or sub for, I'll get several quotes and "interview" them.  I'll find a few to talk to, maybe a contractor or friend's recommendation, and 1 or 2 that I locate from Angie's List or local google searches.  My trusty flooring guy was from Angie's List.  While a lot has to do with the work they can do, the rest has to do with personality.  If you do a good job and I think we work well together, you're in like Flynn.  If you do a decent job but I find you to be antagonistic, you need to go away.  I spend a lot of time with these people and I can't deal with people that cause me more stress than necessary.  If I'm working with someone new, I admit that I do hover and ask many questions.  I make sure they know I'm a picky client and expect it done right.


How do you decide what to hire out vs. do yourself?

My very basic rule on this one is if it has to do with structure, plumbing, or electrical, I call the pros.  I'm only willing to deal with aesthetics (tiling, light woodworking, painting, etc).  Even then, I can't do it all myself so that's when I start weighing time vs. $$ and that's different on each project.  I don't have time to tile 2 bathrooms, a kitchen, and an entry way all by myself and have the project done in a timely manner.  So I'll take on a tiling project or 2 and hire out the rest.  I generally make it known to my contractor that if I'm running out of time, I may have them take over one of my pet projects, or alternatively, if I'm running out of money, I may cross an item off their list and do it myself.  I know it's possible to frame walls and hang drywall myself, but you know what?  I just don't want to.  If I try and do too much, these flips would never get done (*coughlikemilliecough*) so I really need to work on improving my delegation skills.

 How do you determine your timeline?

Seasons definitely have a HUGE part in this one here in Massachusetts.  When we bought Millie late last summer, we talked about when we wanted to have it back on the market.  We could have rushed to get her done faster and hired out more of the work, but that would have had us listing right around Christmas.  Christmas is not exactly a peak real estate selling time.  We decided to take a bit more time so that we could get her back on the market early Spring when the market was hot, which totally worked in our favor.  Aside from seasons, timeline requires thought and planning, just like determining the budget for the projects.  How much work needs to be done?  What can be done simultaneously (scraping wallpaper and rough plumbing and landscaping), and what needs to be sequenced (rough plumbing before drywalling before tiling).  If we want to have the house back on the market by a specific date, I look at all the work and see if its feasible.  Admittedly, this one may be my toughest part.  I always seem to under estimate how long painting is going to take or something gets pushed back for some reason and throws off other planned items.  No matter what you're renovating, this always happens though, so just be prepared.  If you want a project done by X date, expect it to be actually done a few weeks later (and try to plan accordingly).  Ce la vie renovations.


Are you on site pretty much every day?

You betcha.  Just because I work for myself now doesn't mean that I don't get up, put on my boots and head to work.  In fact, I work more hours and harder now than I did at my old 9to5.  I'm there usually 5 or 6 days a week painting, fixing, tiling, etc.  The beauty is that since I'm the boss, I can be flexible when I need to or pop over to my sister's for an extended lunch and cuddles with the niece and nephew.  I'm working towards being able to be on site half the week and working on design clients the other half, but it's a process.  Now that I have a group of contractors that I trust, it'll be easier for me to take a step or 2 back, but as I already mentioned- delegation isn't my strongest quality.  I'd always prefer to be there to make sure that even if I'm not doing it myself that things are getting done in the way that I was envisioning.

Do you feel more confident now that you have a few projects under your belt? Does this translate into making bolder decisions or a willingness to take on bigger/more complicated projects?

Yes to all of that.  Clark, the first flip, was a very good one to get my feet wet on because it didn't need much.  Clark was like taking a dip in the kiddie pool and Millie was a cannon ball into the deep end.  Each flip thus far has needed more work which means a bigger budget and hiring out more.  It worked out that we've ramped up gradually from flip to flip so now, I can be a bit fearless.  If the numbers work, I'll figure out how to fix the house, even if it's falling down!



How many projects would be your “ideal” number per year?

My answer here varies by the day, but it would be nice to have 3 projects completed in a year.  If I could be much less hands on, I wouldn't object to 2 at a time.  It all comes down to $ though.  If we find 2 houses that we think we can rescue and we have the funds to make them both happen, we'll see!

Do you feel like you make enough profit in the end to make a decent living?

Yes, although flipping isn't for the light hearted.  It's a bit nerve-wracking to get 1 paycheck every 6 months or so, but it's pretty rewarding when that does happen.  Since I'd prefer not to share the actual numbers, I'll share this pretty little graph.


As you can see, Millie has been the biggest investment, but the biggest return.  Frankie was a bit of a hiccup, but we still ended up in the positive, so it wasn't a waste of time or money.  Hubby and I have always talked that flipping is a "get rich eventually" scheme, not a "get rich quick" scheme. Flipping isn't where our plan stops, it's a tool to get to the next steps.  Eventually we intend to fix up a few properties to rent out, but while I can still be more hands-on, we'll keep 'em flipping!

Next Friday, I'll wrap up the Q&A with a few fun flipping questions.  For now, however, I'm off to Disneyland Brimfield!

Flipping Q&A: The Basics

Wow, you guys are awesome!  I received so many great questions that I'll be breaking the flipping Q&A into several posts.  So let's start at the very beginning (a very good place to start). Do you work with a realtor who alerts you to good leads for flip houses, or do you go it alone and hunt on MLS?

We work with a great realtor who has also flipped houses herself in the past, so she gets it.  She knows what we're usually looking for and will let us know when she sees a house that we need to see.  I do search inventory myself as well, but it's great to have her as a resource.

Do you only look for houses in your neighborhood or do you choose projects within a certain radius of your home?

We've tried purchasing properties in our own neighborhood but it's very competitive and we always end up losing to a higher bid, unfortunately.  Closer to Boston means more competition and higher prices.  I'm willing to travel about 45 minutes to a flip, so that's where we set our radius.  When I was working my corporate 9to5 in Boston, I had an hour commute, so as long as we keep it under that, we're golden.  Even though I look at houses in many different towns, thus far all 4 flips have been in Worcester.  It's a 45 minute commute from my house, but, it's conveniently close to my sister, in-laws, and friends so I've always had a bathroom to use when the flips had none.  Higher prices and more competition do generally mean higher selling prices as well, so I'd love to expand to another area.


Do you already have an idea of how much it will cost to flip a property before you put in an offer? If so, how do you come up with this estimate?

Our realtor and I will generally head out and look at several properties at a time.  After we finish up, I head home and start doing some math for the properties I'm considering.  I'll start a spreadsheet with the costs that I estimate for the fixes to see if the numbers work for us.  These are very rough guesses based on my previous experiences.  For example: 5k per bathroom update, 15k for a kitchen, 5-10k for a new roof (depending on size), etc.  While I don't generally use high end materials, I like to think that I put a twist on my projects that makes them look much more expensive.  We always add in a 10% "sh*t we forgot* factor to cover the unknown or stuff we just forgot to take into account.  If there's something that I really have no idea what to estimate, I'll call a friend who's had similar work done, or find someone to give me a ballpark cost.  Once we have a rough reno budget estimated, we look at the potential resale price, subtract out carrying costs (utilities, taxes, insurance...), subtract out the reno budget, then decide how much profit would be worth us taking on the project and adjust our offer accordingly.  This is where it's all about the numbers for us.  If the sellers are asking far too much for the renos that it needs (which is most often the case), there's no room for profit for us and it gets crossed off the list.  We see so many cool houses that I would love to save, but the numbers just don't work.  Granted my estimated budgets aren't always 100% but so far they've served us pretty well.  We went over on Millie about 5k due to lots of surprise plumbing issues, but ended up about 3k under on Grover.  I'd say that's not terrible for rough estimating.

HOW exactly do you go about purchasing the house?

When Hubby and I first started talking seriously about flipping, we started to sit down to talk to a bank about a commercial loan.  We have an LLC established for our flipping, so we were looking to borrow as a company.  We didn't end up having to go that route because we are lucky enough to have family willing to invest in us and provide us with a "private" mortgage.  Basically when we put in offers to buy the houses, we look like we're cash buyers because we do the mortgage on the side.  This is a huge plus since a lot of the properties we try and buy don't qualify for traditional mortgages anyway.  While we borrow to purchase the house, the reno costs thus far have come out of our savings.  We started small and have been reinvesting the profits which has allowed us to take on bigger fish like Millie (more on $ next week)


Are there certain things you look for or avoid when considering a house to flip? 

As mentioned above, the numbers have to work for us to consider making an offer on a property, but I'll admit that choosing the next project is a bit emotional too.  I'll be spending a LOT of time and money on this property and I have to like it.  Obviously antique homes just charm my pants off, so they generally get more consideration, but if we can turn a profit quickly on a basic ranch, you bet we're running the numbers.  Very few things actually scare me away from a house.  I can deal with questionable stains, stenches, blue bathrooms, badly done DIY renos... I'm even willing to deal with structural and termite damage if the house is desirable enough (for example a historic property in the right location).  If there's room for profit after dealing with the structural issues, termite damage, or new septic system it'll stay on my list.  What won't stay on my list is houses that just don't make sense, and there are a lot of those out there.  Like a house where the only way to get to the in-law suite addition is through the only bathroom or a house where there's no hallway by the bedrooms, just doors through the bedrooms to get to the next (both true stories).  I have to be able to make sense of a house, because if I can't make sense of it, buyers won't be able to either.  It's worth considering if I can move a few walls and have it make sense, but more often than not, these weird houses are beyond my help.  They either started as old farmhouses or mixed-purpose buildings and don't make sense for any modern functionality without MAJOR renovations (i.e. gut and add an addition or dormers) or they're a house that has been the victim of bad homeowner renovation ideas (in-law suite through the bathroom??).

insta barn

Before you close on a house, do you have an inspection to search out any big issues? Is that a condition of closing?

We always get a home inspection to make sure that there's no issue that I wasn't already accounting for.  We don't make it a condition for closing since we generally by "as-is" properties anyway.  We just want to make sure that there aren't any major issues looming.  We've only had one property that we backed out of after an inspection.  After our offer was accepted, we discovered that there had been a ton of unpermitted work done to the house recently and the inspection turned up structural issues on top of that.  We came back to the sellers with a lower number since we would have to restructure the basement in addition to tearing walls back open to get permits for the plumbing and electrical (who drywalls the entire first floor when you don't even have plumbing run to the second??).  Well, they wouldn't take our lower offer and never put the property back on the market.  It's been sitting vacant and half (poorly) renovated for the better part of 2 years.  If we could get that house for the right cost, however, we'd still buy it in a blink.

Did you have much experience in construction/renovation before you got into this?

Nope.  I'm the product of growing up in a very handy household.  Add a design degree on top of that and it's a dangerous mix.  Growing up, my dad and uncle built our garage, my dad finished our unfinished basement, and my parents built their dream multi-level deck.  (All with an eye for detail.  If you do it, do it right.)  I think handiness is in my blood.  I didn't really get into any heavy duty stuff until we got our home 4.5 years ago.  Before my first flip, I had never tiled,  and had very limited tools and experience.  My dad got a call just about daily- "how do I do ______?" or "can I borrow _____ tool?"  Now we joke that the student has become the teacher (in some areas).  My brain works in a strange combination of an artist and an engineer- it's about how the pieces work, but how do the pieces work to make it pretty?



I think that's enough for today's novel.  Clearly I could talk about flipping for days, but I'll spare you for now.  I'll be back with more Flipping Q & A next Friday, so if you think of more questions, toss them my way!

Have a great weekend!