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Photo: Courtesy of - Thinking of buying a home to renovate and flip? Be ready to blow your budget when the little things start adding up.
Winter Park / Maitland Observer Thursday, Apr. 14, 2016 6 years ago

Christina Rordam: Don't flop your flip

Flipping a house isn't easy
by: Christina Rordam

Don’t flop your flip! The real world of investor real estate

Real estate investing is a field everyone wants to get into; many also regard it as easy. Realtors and real estate investors can tell you; it isn’t always as easy as it looks on TV. I should confess: I don’t watch much of those house-flipping shows or even the house-hunting shows. I’ll tune in here and there, but when you’re doing the selling all day you don’t always want to go home and watch a sugarcoated version of it on cable. You know what show I love? “Catch a Contractor" on Spike TV. It’s a realistic look at the underbelly of home improvement and what can happen. So in the spirit of that show I’m pointing out some fallacies and pitfalls to expect and avoid when you are about to embark on your real estate investing journey.

Real estate is hyper local, be realistic about the returns

My inspiration for this article came to me as I was scrolling through RealtyTrac and noticed a video clip of a former nurse featured on “Nightline” who has flipped 28 houses. She calls out home improvement reality TV as being unrealistic and describes her process. While a more realistic view of investing is portrayed in this clip, she makes a gaffe when she declares the market is flat, not a sellers or buyers market. Let me take out my soapbox and shout, “Real estate is hyper local!” These blanket descriptions of the housing market are misinformed and incorrect. She follows that by stating that she has been caught up in bidding wars and fields multiple offers on her flips, which sell as quickly as in one week. She then attributes her quick sales to a lower amount of inventory. We have a sellers market in her description, yet moments earlier she says it’s neither. I can appreciate and recognize her success. Obviously, to survive 28 flips, you are doing something right. But let’s be clear, it’s a sellers market here in sunny Central Florida. The point I think she wanted to make was that there aren’t the huge profit margins waiting on every corner like during the recession. True enough. But deals are still out there. It’s just our expectations that need to change. Expect profits, but be reasonable. Sure, there are diamonds hidden in the sandy soil of Orlando and greater Central Florida, but it’s still important to understand not every glittering house is gold.

Cash rules everything around me

Cash is still king. Ultimately, if it seems too good to be true it probably is. That said, some of the best deals I’ve seen are homes in need of repairs that are far-reaching or major in scale. If sellers are looking to unload a fixer-upper they often prefer cash. So, if you have cash the market is truly your oyster. The former-nurse turned-flipper mentions contacting sellers directly and driving around as the best ways to find deals. Here in Florida, buyers’ agents represent you for free and often even FSBOs (For Sale By Owners) are willing to work with buyers’ agents. If you find a deal yourself and want to go it alone it is certainly doable, it’s just not a requirement in order to turn a profit. Truly distressed sellers in pre-foreclosure will need bank approval, and banks do pay buyers' agents’ commissions.

Driving around is good too, but in a hot market it pays to be connected to find out what may be hitting the market soon. Realtors often represent larger investment groups so consider us too. While I do think driving neighborhoods looking for homes is great, if that’s your sole method you’ll miss out on a large market share. An alternative I don’t hear discussed much if you don’t have cash outright is to buy the home using a renovation style loan, fix it up and move in for a while and then sell it. I hear from more and more buyers of the millennial age who purchase their first home with this mindset. What a great way to break in to investing if you are low on cash! Something to consider.

Inspect your flip before you buy it, and expect to spend more time and money than you estimate

The larger cost in flipping can often be the labor and not the materials. So get an inspector to check out your flip pre-contract or during an inspection period if you have one. Then, whatever time and money you’re quoted, budget more. Don’t bank on staying within your budget and definitely don’t plan on a 30-day flip. It’s possible, sure. Just don’t paint your self into a corner resource wise. Unless you are experienced or know someone who is, hire a contractor or a trade for things like flooring, plumbing, A/C installs, pool work, etc. You can often get labor at a discounted price if someone is looking for side work on the weekends or days off. That route may take more time, however, if you aren’t their main employer. Ultimately, contractors and handymen can overbook themselves from time to time and not meet deadlines. Or someone’s kid gets sick, or they get sick, you get the idea. Create a cushion for yourself time and money wise by mapping out your repairs and renovations ahead of time. Create a budget and have some funds set aside so that you’re prepared for things that can’t be seen with the naked eye. Don’t forget a reasonable timetable for completion! It’s a good idea to ask your Realtor about absorption rates and average days on market so you know how long to expect the marketing of the home to take.

It takes a village to flip a house

I’ve worked with some large and very successful investors, some of which had their own salaried contractors and teams set up to complete their flips fast and furious. The average investor doesn’t have this type of team on payroll, but it doesn’t mean you can’t create a team to fix up your properties. Because trades and contractors take jobs when they can get them and can get booked up quickly during busy times I recommend having a list of as many trades and contractors as you can. Ask for recommendations, search Angie’s List, ask your neighbors. That way if you’re ever in a crunch you have a few names to call for back up to keep your flip schedule on track.

Unless you work in a tire factory, don’t reinvent the wheel

Keeping your repairs and remodels simple is key, especially your first time out. Even after your first time, taking out walls and redesigning the floor plan of a home will add time and money to any project, so, unless you are experienced like our nurse friend in Arizona you may want to stick to the basics like having a good solid structure, keeping things like roofing, plumbing, and A/C in working order, and looking at flooring, painting, and addressing any existing problems. If you do have the capability or enough budget to try something like moving a wall, then go for it but remember to prioritize. An open layout isn’t good if the roof leaks.

I enjoyed seeing the former-nurse turned pro-real-estate-investor in that “Nightline” clip. I think she had some good things to add to the dialogue so many of us are having with each other about real property and how to profit from it. I hope my tips and experience gleaned from selling hundreds of homes and 10 years of being a Realtor shared here help too. Real estate is one of the best ways to grow wealth and create stability when done the right way. Everyone deserves to live the American dream of financial independence. Flip on, flippers!

Christina Rordam is a licensed Realtor and Central Florida native with 10 years experience helping Orlando area buyers and sellers achieve their real estate dreams. She is a member of the Orlando Regional Realtor Associations Top Producer Club and holds the CDPE, CNE and CSP designations. Do you have any questions or a topic of interest that you’d like to read about? Contact Christina at 407-928-8294, [email protected]. View homes online at

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