Is Flipping Houses Profitable? - YouTube

okay all right teach you how to start flipping  houses in new york already doing how to grow your  

business so today we're going to talk about very  general question is flipping houses profitable  

first of all let's talk about what flipping houses  mean and the answer obviously is going to be  

depends because you can flip houses and lose money  i know i have and you could flip houses you know  

there are guys doing literally eight figures a  year doing it uh making money so i think my camera  

on this thing is terrible but whatever okay i  think the camera on my phone is better so first of  

all how i define public houses and a lot of people  five living houses is different in the industry  

most people consider a flipped house to be a house  that is closed on it means you take possession  

of it and do major renovations to it and then  you sell to an end user buyer that is what most  

people say i thought this is going to be a quiet  area i don't know how quiet it's going to be um

another thing that i do i do two other  things so i do flip houses i also wholesale  

houses which means i buy houses uh go  to contract on a house i'm sorry never  

close i assign the contract to another  cash buyer who's going to do the work

yeah

so some people consider that flipping i consider  that a wholesale sign right you're flipping the  

contract you're not taking possession of the  house i also hold tail properties which means i  

close on them and then i um i uh do very little  work to them and sell them to the public and use  

a buyer now um the question is is it profitable  right that is the question golf cart driving by

the hell is that um

now the question is i don't even  know if this is recording at all  

to be honest with you i hope it  is yeah i think it is all right

um

i need to change the frame per second rate and say  

i don't know what that means i'm not even sure  this is going live at all but let's say we are

sorry so

is it profitable of course it can be profitable  everybody knows you make money doing this the  

question is how easy it is to screw up right so  i've lost money on deals every single deal that  

i lost money on i lost money for the same reason i  did i'm going to say too much work it's probably a  

good answer took too long and then i priced the  deal when i sold it based on my profitability  

which is a stupid mistake right if i would have  priced it based on what really the market was  

indicating i would have sold it for the same price  i sold it for eventually but um a lot sooner and  

time is money when you're flipping houses when you  want to take possession of the property the clock  

really starts and you have interest charges if you  borrow you have interest costs if you're borrowing  

money you have taxes on it you have upkeep charges  all those things add up so the longer you hold the  

house the worse it is so the guys who are really  successful guys really doing i'm talking about  

eight figures making 10 million or close to 10  million dollars a year flipping have the system  

down where they can get in and out of a property  really quickly like four to six weeks that's it  

that is a big key to being super profitable now  if you're thinking about wholesaling houses and  

that's how you define flipping houses it's usually  profitable but the difference in new york when  

you're wholesaling has a tremendous difference a  lot of differences but the main difference in new  

york is that it's not a risk-free transaction  in that when you go to contract in 49 states  

you basically put a contingency in there that you  can get out of the contract if you're not if you  

don't want it that's how it works really in almost  every state i mean my friend told me in california  

you know i bought a house and then i got out in  escrow they called in contract there in escrow  

um in new york all that stuff all those  contingencies get done before the contract so  

you you do an inspection before the contract  there's no outs right every time i go into  

contract i either have to close or i have to  assign sign it it's really backwards i have to  

assign the contract so it's not a risk-free  proposition if you have a great deal that's  

fine so that if you're scared of those risks and  you can easily partner up with somebody like me  

or anybody else who does this significantly in  any significant form and what i can tell you the  

main thing that people don't tell you you need to  know is what is the deal or not you know when you  

go to these gurus online and they tell you it's so  easy you just know we i don't know anything about  

real estate i just know what i can buy a house  at a discount yeah so if you if you have this  

inspection contingency out yeah you can pay way  too much for it you can't find any cash buyers for  

it and you get out of the contract but in new york  you need to know if it's a deal or not so and it's  

not so complicated it's not so easy because um you  know we think that we're gonna buy a list and all  

the numbers are gonna be right and everybody's  gonna answer the phone everybody's gonna say  

you know enough people there are gonna say i  need to sell this house immediately for any  

price that's not what's gonna happen they're gonna  say hey i need three hundred thousand dollars for  

it you're not gonna know if 300 is a good deal  or not that's where somebody like me comes in  

so you can show me a deal now do not send me a  deal unless you've spoken to the seller you can  

tell me the whole story right some people call me  like oh a house is listed for sale i don't care i  

don't want properties i listed for sale or almost  never deals almost never um let's talk about why  

the reason why listed property is not  a deal 99.99 of the time is because  

especially in today's market where the market's so  hot if somebody's asking 400 000 for the property  

you think it's worth 500 let's say let's just  take that at this example number one is that  

it's not worth 400 000 it would have sold right  so everybody can see that it's open information  

it's a red ocean everyone there's sharks it's a  shark infested waters everybody's looking for it  

so number one number two you can't pay what it's  worth right now so it's not even worth 400 the  

seller wants 400 maybe this will take 380. you  can't even pay 380 right if it's really worth 320  

right which is really the price which is the  reason why it's not selling at 400 you know you've  

got to pay a discount of that so it almost never  works out i have bought listed properties but very  

few of opportunities always an interesting story  as to why anytime a prospect calls and says in  

my properties listed like listen it's probably not  going to work um if it's listed it usually doesn't  

work and then then i know if they pushing back  is one of the greatest tools that we have we're  

talking to sellers and then i'll hear something  if they say something well i think you should come  

anyway then i know that there's something they  just don't want to tell me and i'm gonna go see  

the property and talk to them and see why um but  most of the time they go you're right and that's  

fine that happened this morning about someone  they wanted 500 000 for a house and i'm like  

you know i think that's about what it's worth i  can't pay full price because oh it's worth 520.  

i'm like it's still i need a deeper discount  that's make money here's no problem and we every  

part is friends it's fine everybody understands  that so but almost every newbie in the business  

is afraid to push back on a seller right they're  afraid oh that's the deal i'm going to lose by  

pushing back never never happens that way ever  if it's a deal the guy really is motivation wants  

to sell to you pushing back is only going to  cause him to come closer to you or if it's not  

a deal then pushing back is going to make the  guy go away either way you win you can't lose  

by pushing back so those are the three most  beautiful sentences that you can ever say  

i'm an investor i have to buy properties at a  discount to make uh to make profit i don't think  

we're a good fit those are the most beautiful  three sentences ever created you cannot go wrong  

saying them i promise you've used them more you'll  get more deals now um where the hell did we start  

with this oh it's a profitable so it's very  easy to get into a flip and when i say flip  

i mean a rail renovation a serious job and lose  money because the problem with flipping and why  

i try to keep it to a minimum is that very often  things lead to other things that means like you  

take down a wall like you said you want to do a  bathroom you take down the tile in the bathroom  

you take down a tile in the  bathroom and you realize that um  

the plumbing screwed up you take down the  beds when you realize there's some termite  

damage take out a wall and bathroom and you  realize there's all kinds of other issues here  

that you never knew about now i'm not saying  you should do a shoddy job i'm just saying  

no one would ever know that and it may never show  up for 40 years or 50 years if you didn't uncover  

it but then you get the case on the might as well  so well i'm doing this i might as well i might  

as well open the bathroom more i might as well  and that leads to more and more things when i i  

got renovated every house i that i bought for  the first four years i was in business and um  

you know a lot of things led to other things and  my attitude was i got to make this thing perfect  

so that nobody will say no to it which is a  completely stupid attitude um because there  

are always reasons why people say no to your house  right they don't like the location they don't like  

this little layout they don't like the area that  it's a million they don't like your paying card  

anything could be it so my opinion now is to make  it just i need i want to make it just good enough  

that i can make a decent profit i don't need  to do everything right and and sometimes i'm  

wholesaling these people and they tell me oh this  house needs 180 thousand dollars and i'm thinking  

i can fix it for a 40 and i can make this decent  40. for 180 he's going to get another 40 000  

so he's gonna spend another 140 thousand dollars  for 40 000 not a good plan and i can't tell you  

how many guys are that do that and it's as to me  it's a sign of uh of inexperience or maybe it's a  

sign that they made so much money on their deals  that they can do they can afford to i don't know  

but for me i don't look at properties like that  i'm like i i need i have a simple checklist i need  

i need all i need the roof in decent shape  i need the windows decent shape i need the  

kitchen to be to be nice i need the  bathrooms to be good unless there's  

more than two bathrooms one in case in that case  maybe one bathroom doesn't have to be so great  

i need the floors in good shape i need the walls  in good shape that's basically it i don't need  

open concept i used to do that i used to buy capes  all the time elmo on valley streams to knock down  

the walls put up headers get permits or a whole  thing and it and they look better for sure but  

i promise you i lost money doing that on the 50  capes that i did where if i didn't open them up  

i would have saved money time and i probably  would have sold them for the same price so  

um we completely got himself but is it profitable  [ __ ] yeah it's probably a million guys i'm at a  

i'm in cabo san lucas now with the 30 other guys  from investor fuel and these guys are a lot of  

these guys making tons of money seven figures  all day because their guys make almost seven  

figures a month here and uh sure they do great  but it's easy to screw up and it's easy to make  

simple mistakes when you close on something and  you start doing work to it if you don't know what  

you're doing you get screwed by the contractor  you can get screwed by the local municipality you  

thought you didn't have to do something and then  you did and you have to undo all your stuff the  

costs usually cost and time usually come in for  more so you need a real cushion you need a lot  

of room but there are people who do it and make  money on the simple things but if you when i say  

flipping houses i mean buying something closing  on it and renovating it is easy to lose money also  

but sure it's profitable for sure wholesaling is  easier for me i like it better because i get paid  

when the deal closes instead of nine or months  or 12 months later down the line um it's and  

it's less risk and for me when i got to the point  where i had so many deals that i was flipping i  

was closing out and renovating i wanted to put a  shotgun in my mouth and blow my head off because  

it was very hard for me to run the contractors  and materials go to the wrong place and to me  

any business where if you get to where you hope  to get to where volume kicks up things get more  

difficult everything every business thinks more  than the point where you can't handle it anymore  

um and the things that i didn't like multiplied i  didn't like dealing with municipalities i didn't  

like dealing with contractors to me that wasn't  a great business that i wanted to do so about six  

years ago i switched to going direct to seller at  that point i was only buying auction i go direct  

to seller and i can wholesale at least 50 to 60  of the houses that i buy and the other ones i can  

i can uh cherry pick the ones that i  want to close on and and work on okay  

so i hope this was helpful if you're interested  in all the ways i can help you go to how to  

flip new york.com if you were interested in  my course that you just had to do what i do  

but how to flip new york.com how to flip new  york course dot com if you're interested in  

finding out more about one of my coaching  go to coaching.how to flip new york.com  

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