[Music]
Hello everyone and Welcome once again to
another episode of the Selling Greenville
podcast probably the greatest podcast
ever at least that's what I think and
certainly the greatest real estate
podcast in Greenville South Carolina
because we're one of the only if for no
other reason reason but but yes I
think it's pretty great hopefully you
think it's pretty great which Segways
right into if you love the podcast
please give us a rating or a review and
make sure you subscribe don't forget to
download episodes as necessary and as
needed and if you need to reach me for
any reason if you're looking to buy or
sell a house or you know someone looking
to buy or sell a house or you want to
discuss a podcast all my contact
information is always in the show notes
by the way if you've never listened to
this before and you just clicked on a
Apple link you can listen to this on
pretty much any other platform that's
out there we're on audio boom Google
play several others I don't remember
all of them that I that I send this out
to but just look up selling Greenville
we're on a bunch of different platforms
today we are talking about fix in flips
fix and
flips people thanks to HGTV
a lot of people are interested in
flipping houses it has become a
trendy thing over the past 10 15 years
but it's taken people a while to
figure out the the standardization for
it right because HGTV is very
unrealistic and it it's taken a while
for kind of the General market for all
these people that you know learned about
flipping house es from watching shows to
figure out how to actually make money
doing it today we're going to be talking
about a very specific part of flipping a
house which is being able to quickly
identify what type of flip you're
dealing with and what that means because
at the end of the day it's rare that you
can fully analyze a property in this
market in the sellers Market prior to
going under contract in other words you
typically prior to going under contract
you have to do a quick analysis and be
very decisive because there's going to
be a lot of other competition a lot of
other offers offers that are Asis with
non-refundable earnest money deposits
all sorts of things and you need to be
able to be decisive and confident going
in in your offer in your purchase in
your numbers and you might not have all
of your numbers down to a te but you
need to at least have be able to form
form a general idea of what you're
dealing with and what that's going to
mean so we're just going to talk today
about a handful of
stereotypical types of fixer uppers
and what that means for you if you're
looking to purchase them how how that
impacts the way you evaluate the
properties so here we go we're going to
start with a term that I I did not coin
this is a common term in the industry
but what we call lipstick flips now
imagine that you're you're going out to
a party and you're already fully dressed
you have everything ready to go you're
ready to go to the party all that you
need is to put on your lipstick and then
you're good to go you are out the door
on your way to the party that is the
analogy of a lipstick flip this is a
house that is good to go in just about
all ways possible you just have to put
some lipstick on the pig so to speak
it just needs cosmetic stuff and and the
two big cosmetic
things maybe you can say three but but
at least the two big ones are painting
and flooring if you want to add a third
one in there you could say cabinets and
countertops maybe that's three and four
but those are those are are the big ones
painting and flooring every single house
needs that right every single house I
should say that is a flip possibility
is going to need those two things those
are going to be two major expenses that
you'll always have to do and a lipstick
flip is one that doesn't need a whole
lot beyond that maybe just a handful of
small things a few little tweaks maybe
an appliance here or there but by and
large it just needs a little bit of
lipstick and it's good to go now what
type of properties are typically going
to be a lipstick flip type of property
well typically you've got the ones
that are going to be predominantly less
than 20 years old such as in Five Forks
or Greer some of these areas where
there's been a lot more development in
the past 20 years I've seen these types
of flips or or these types of
properties come on the market in tailor
you know with some of those brick
ranches and the tailor area where maybe
it's an older person that's lived there
for a really long time and they've kept
really good care of of the house but
it's just all the Cosmetic stuff needs
to be improved it's got wallpaper that
needs to be taken down and replaced with
paint old you know loliflooring or
whatever the case may be but those
are generally the areas that you're
going to find these and so a lipstick
flip is is an interesting option from
the standpoint of it's typically going
to be be kind of low risk but also kind
of low reward cuz typically there's
going to be tons of competition for
these types of properties because not
only are investors potentially
interested in it but also people that
are owner occupants they might even be
able to get normal conventional
financing if all it needs is some
cosmetic stuff but the house is in good
shape you've got owner occupants that
for sure could get financing on that and
so they're going to be in the potential
buyer pool for that property and so
you've got a lot of competition so
that's going to increase the price the
purchase price on the property which
means that your margins aren't going to
be that great but in theory you can turn
the property around pretty quickly do
the work really quickly get it sold
really quickly and often times these
properties tend to be in neighborhoods
where the comps are really reliable
you're not taking a major risk and so
you know pretty much at the end of the
day what you're going to end up with in
terms of of your profit and these types
of flips are personally my favorite
mainly because in terms of of what I
prefer I really prefer the front end of
the flipping process I like finding
properties I like analyzing the numbers
and doing all of that I don't like the
process of rehabbing them that part is
stressful for me I don't enjoy that it's
not my favorite so these properties that
don't need a whole lot of rehab are
really ideal for me and I've fli
multiple properties over the years that
fit this description I'm flipping one
right now in my neighborhood that that
fits this description and and I'm
really excited about it I think I'm
going to do quite well on that and
and yeah and and I'm happy about it
really the first thing that we did in
that house is we started yanking out the
flooring now we're painting we're
going to put new flooring back in there
we're probably going to paint some
cabinets there's still a few things
that we need to assess a lot of minor
repair
and so forth and so on but it's
it's at the end of the day it's probably
going to end up being less than $115,000
worth of work which is great that's
and when you're flipping a house
$115,000 is hardly
anything and to be able to do that
and still make good money I'm pretty
happy with that and it's not a major
headache at the end of the day that to
me is really important so that's a
lipstick flip the next one down from
that would be what and this isn't as
catchy of a name but a major systems
flip so a major systems flip
would have the Cosmetic stuff it's still
going to need the flooring and the paint
and all of that but it's going to need
some major systems to be overhauled
for instance the roof the roof might
need to be replaced the AC furnace water
heater major things like that maybe
stuff stuff in the crawl space thing you
know Vapor Barrier and moisture
remediation things like that it's going
to need some type of major work in a
major area of the house that's not
structural or anything like that but it
it's just going to need some type of an
update like that now these are probably
out of all of them the most common that
you find these are you know these pop up
several per month both on and off Market
but again there's a lot of
competition for these because you still
have some owner occupants interested and
they're they might not be able to get
you know normal conventional financing
but they might be able to get 203k
financing a renovation loan or
something like that and so these are
are tricky to find like like the
previous the lipstick flip they can
be tricky to find ones that you can
actually make money on when flipping
but there's enough of them that come
through that if you know what you're
looking for you can find them you can
flip them and you can make money
these are kind of again pretty low risk
there you know there's not a whole lot
that can go wrong when you're replacing
an AC unit as long as you know what to
expect in terms of the costs and and
the reward on them is probably going to
generally be fairly low as well it's
very similar to the lipstick flip in
that
regard I I flipped a house that
fits this description a few years ago
well actually I I did what we call a
whet tailing of this house where I
bought it from someone that was just
trying to offload it and I then took it
and sold it to a flipper and I made good
money doing that and then that flipper
then went and did a bunch of things
to it and then they listed on the market
for in my opinion way too much but who
knows I haven't checked to see
recently if that sold because I saw it
hit the market several months ago and it
was just sitting on the market but if
I had flipped it instead of just passing
it on and and making a a quick Buck
passing it onto a flipper I would have
done quite well with that I probably
would have made you know I think
probably like $80,000 worth of of of
profit just based on what I was looking
at in terms of of what needed to be done
maybe not quite that much maybe closer
to like 60
70 but that was one where you know it
needed a new AC needed a new furnace
needed new flooring and etc etc and one
of the things that's really important
with these types of houses as well as
the lipstick flip type of houses is the
size of the house and honestly this is
an important consideration for all of
these because in real estate we always
think from the standpoint that bigger is
better right because the bigger the
house the the more it's worth but when
when you're flipping a house a big house
means more work more liability more
potential for something to go wrong and
really the ideal flips are once you
start getting into these ones that need
more and more work particularly are
ones that are smaller and maybe in some
of these areas where you know smaller
homes sell really well like Parkins Mill
or Gower or you know a Guster Road area
or North Main or or you know all all of
kind of those those general areas
that we have in and around
Greenville and so that's just
something to keep in mind just because
the house is if you walk into a house
and it's massive and it needs a ton of
work you have to understand that you
have to budget for that yeah it might
be it might be able to resell for a good
price but how long are you going to be
working on that flip if it's a really
large property that's definitely a
factor because time is money when you're
when you're talking about flipping
houses the next one on the list is the
structural flips and this is pretty
self-explanatory it has major structural
issues in addition to the other things
and and sometimes structural issues I
say major but sometimes people can
think structural issues are major when
they're really not like if it just needs
some peers replaced or short up and in
the foundation honestly that's really
just minor but some people might
consider that to be a major thing you
know if the floors are all wonky in the
house it will feel like the house is
about to fall down but really it might
just need a few a few peers to be
replaced or maybe a few Jacks to be put
down there now if you need to
completely take out major beams and
joist and all of that whether that's in
the Attic or in the crawl space or
whatnot now that can start becoming a
lot more pricey and so that's where it's
really important with structural flips
that you actually know what you're
getting into how big of a structural
deal are we talking about because not
all structural things are equal a lot of
structural things are really simple to
fix and you need to make sure that you
understand the difference between a
simple and a non-simple one I I had you
know a situation not too long ago where
some clients they they had a contractor
that in my opinion was just flat out
lying to them that there were some
cracks in the brick facade of the house
and that contractor was making a big
deal that that house had a foundation
problem and I I got another contractor
to look at it and one that I trust
because my client they were using their
contractor and I didn't like what they
were I just the vibe that they gave off
I just didn't trust them and so I
brought in someone that I trusted just
to get a second opinion and he thought
that that was absolutely bogus you know
we were talking about a house that was
50 years old and had very minor settling
that was causing some cracks in the
bricks in the brick facade and that
brick
facade any good contractor will explain
to you that that that is not what is
holding the house up the framing of the
house is what's holding the house up
that brick facade goes over the framing
and so these are all things that you
have to keep in mind when you're
assessing a a structural
a structural issue with the house you
also have to keep in mind that depending
on what type of structural issue that
it is that you're dealing with you may
actually have to account for things
being damaged on the inside of the house
you know if for instance if the floors
are all wony and I've been in houses
where one wall was higher than the
other because because of structure
issues you may have a
situation where after you remedy those
things there might be all kinds of you
know flooring that gets messed up or
drywall that gets messed up or the
ceilings might get messed up you need to
account for all of that make sure that
if there are you know if you're going
to be really jacking things up that down
below that you don't pun intended Jack
things up on the inside as well all
right I didn't intend to say that that
just kind of of rolled off my tongue
where where can you find these types
of properties well there's a lot of
these are you know the older Mill
houses in particular but in you get out
into West of Greenville or anywhere
there are older houses and you can find
a lot of these and a lot of these come
on the market a good number of them
are off Market as well that have
structural issues probably more off
Market than on Market but you'll see
some that come on the market often times
listed for way more than they should
be but at some point usually those
sellers come down in their price and
I've seen situations as well you know
there was a home earlier this year that
came on the market in tailor that had a
tree fall on it and we have a lot of
neighborhoods with Big
Trees and you know those houses you
know a big old limb or a tree will fall
on on those houses and and cause
structural issues to those houses and
so there's a decent number there's a
handful of those per year that that we
see that seem to have enough margin
in them that you could flip as I said
oftentimes they are off Market there
there are a few that come on the market
per year
but oftentimes you know there's a
big market for these as well and so
that's just something to to keep in mind
I've had multiple clients put in bids on
properties that fit this description and
put in very good bids and not get them
so it's a hot market right now and and
that's just something that you have
to to keep in mind now I bought a house
like this last year in downtown
Greer and I ended up I didn't do as well
on this one as I wanted to but I ended
up similar to the house that I
referenced before I just passed it off
to a
flipper and that flipper I think did
very very well on it that house came on
the market
recently for like dramatically more
than honestly than I would have
thought but that's just you know at the
time that I sold it to him last year we
didn't see the market getting as crazy
as it has and you know downtown Greer
has really done a lot of good things and
so I'm really happy for him he's he's
really done well with that house I
passed it off to him and you know in
hindsight that's one that if I had
done that house came with a lot next
door I sold both of them off to to two
separate people had I actually de dealt
with the headache which I didn't want to
of completely rehabbing the house that
had structural issues and we're talking
about major major structural issues like
the house felt unsafe to be in had I
done that and then built on the lot next
door I mean I easily would have made
over 100,000 on that but that would have
been very time
intensive it would have been a big
headache I didn't want to deal with that
at the time so I just passed it Off made
a little bit of money and just kept
moving there is some value in doing that
but for people that are that really
enjoy the process of flipping and that
have good good teams that can come in
and out quickly and and that can kind of
manage themselves those types of
projects that have the structural issues
can be great projects that have a lot of
money in them and it just kind of
depends it depends on everyone's
situation and I think it's important
part of this part of the reason why I'm
having this podcast this specific
episode is that not everyone is good at
flipping the same types of houses some
of us you know like myself I've carved
out a niche in for myself personally in
some of those lower risk lower reward
properties and I love that I'm I'm happy
to do that I'm not flipping 10 houses 20
houses a year and then the other
structural ones and whatnot that come on
the market I have clients that like
those and and I can pass those to my
clients and try to get them under
contract for those and so there are this
is how it all works and then you know
every now and then there will be
multiple lipstick type of lips that come
on the market at the same time and maybe
I get under contract for one and then
you know I have a client that goes under
contract for another one there's all
kinds of things that can happen
normally I try to give my clients first
dibs on on all of these properties to at
least give them the opportunity and then
if they pass up on it or if they're not
as bullish about it as I am then I'll
put my foot forward it all just kind of
depends but that's the balancing act
that I do as both a realter and an
investor is I feel like it makes the
most sense for me to try to Avail my
clients as much as possible and the
opportunities that are out there and
then if my clients aren't interested
then I kind of jump in but for the most
part when it comes to fix and flips I'm
focused more on the ones that aren't
going to involve as much work because
those are just the ones that I
prefer now after structural flips we've
got the complete overhaul flips and
these need the full package new
electrical new Plumbing new HVAC new
roof Etc they need a little bit or a lot
of everything and these obviously tend
to be in the areas that have the the
oldest houses really any of these
major structural ones tend to be in
areas that have old
houses by which I mean 50 60 70 years
old
particularly in the mil areas around
Greenville and tayor that's where you're
going to generally find these these
types of houses and Denine and Judson
and Mills Mill and Brandon Mills
Taylor's Mill all these different areas
in and and around
them usually a decent number of these
come on the market per month and every
now and then there will be one that that
comes on the market and it's overpriced
and it just kind of sits there for a
period of time and sometimes are
opportunities to low ball those it just
kind of depends obviously these are
higher risk but often times they come
with a higher reward you might have a
possibility to break in on a street in
an area that's transitioning very
quickly those Mill areas that I'm
talking about some of those cover are in
Opportunity zones some of those are
you know being revitalized getting
getting city and county money pumped
into them well most mostly city and
and there's so there's all kinds of
things that happening right now that
can impact the upside of a flip but
generally these are these have more
upside than oftentimes in some of the
others just by virtue of the fact that
they're going to be in these areas that
are being
revitalized and I've got a client
right now that's under contract for one
of these and it you know it's going to
need a little bit of everything but I
mean it's on a street that is completely
changing in an area that's completely
changing in
Greenville and I think he's going to end
up doing quite well on it I think that
there's probably you know 60 $70,000 of
of margin there when it's all said and
done but it's a little bit tricky on the
front end to estimate what it will all
cost because you know you can't get
accurate quotes on every single item
we're talking about tearing down drywall
all throughout the house taking the
whole house down to studs rewiring
re-plumbing re you know doing new
duct work doing literally everything
except for reframing the house and
you know I I don't know if maybe the
siding might be kept we'll have to see
but it's going to be a lot of work
and so there's a lot of projecting and
and a lot of going off of your gut of
like you know okay I think I can keep
this to this project to under this
amount and so it's a it's a higher
upside but it's a higher risk as well
because you don't know what you can run
into in that situation the final
example the final type of Fix and Flip
is a tear down what we call a tear down
and usually the main difference
between a tear down and the last
category the complete overhaul is with a
complete overhaul the structure framing
of the building is in is in good shape
structurally for the most part you know
it might need some foundation work it
might need some some roof work or
whatever but generally speaking the
framing is in good shape whereas a tear
down the house is kind of like
collapsing on itself and I just saw one
of these
recently and I didn't even I was not
even willing to step into the house it
was just like you know what I I don't
know if if the floor is going to cave in
I don't know if the walls are going to
cave in I'm just not even going to take
the risk these are almost exclusively
on the west side of Greenville City View
Sansui you know you you get over
there into Denine and Judson and and
welcome and park you even some parts of
north north of downtown Greenville
like Park Place brutin Town you'll
see these types of properties over there
as well and again basically you just
have to boldos down the house and just
kind of start
over and really for these there there
can be opportunity for these because
you're starting over so you literally
are going to be building brand new
construction which really can have
appeal to people now the key is will it
be the first new construction on the
street I I prefer not to you know I
prefer if you're doing new construction
for there to have already been some
done on the street and so last year I
bought a house in an area like this
right near right now right near
Greenville Memorial
Hospital that it was it was a tear
down for sure but it was right next to
two homes that were new construction
and again this is one because just my
profile for the homes that I that I like
and that I want I didn't want to have
to to take on that whole project and so
I just flipped that on to someone and
just made you know like a little bit of
money like 15,000 something like that
flipped it on to to another
investor and I don't even know if he
started on the project yet but at some
point that house just needs to be torn
down and just new construction put up
and there's already new construction on
that street so he's he's in real good
shape the the model has already been
proven to be true that you can build
new construction and and make good money
on that street and so whenever he
decides to do that he's going to be a
good shape and and so that's can be a
really good option as well the key is
you have to realize that you're not
saving that much and and you could end
up spending more on a property like that
versus just buying a lot and just
building on a lot and so you have to
keep all of that into consideration it
might make more sense to just buy a lot
and just build on that versus buying a
lot that has a house that needs to be
bulldozed down bulldozing the house down
and then building a new house on top of
the foundation it just kind of it
depends on a lot of things and
ultimately it just it just comes down to
numbers but this is the thing is
that each of us we have a different
profile each of us that are into
flipping houses we have a different
profile for a house that we prefer and
at the end of the day it's not like HGTV
HGTV almost
exclusively deals with the first two
categories those lipstick flips and
those major systems flips and then
they'll try to make it look like oh it's
a major structural thing you know oh you
know I saw one recently where was like
termite damage in a really small section
of the house come on I I've seen
termites go up into the walls into the
framing of the house and destroy the
entire house from the inside little
bit of termite damage in one corner of a
house that's not a structural problem
give me a break but this is the way
it is on television you just have to
understand that but in real life there's
a lot more that can go wrong and really
it comes down to your RIS risk tolerance
your confidence in your contractors your
confidence in your yourself and your
ability to assess a property and then me
as a realtor I always try to provide
really good feedback and really honest
feedback to my clients as well I'll run
comps for them I'll tell them I'll give
them a range and I'm usually very
accurate on my range on on what a
property is after repair value what we
call the
arv I take great pride in that I put
a lot of research into that before I you
know send an arv to a client and so I
consider myself or or I try to try to
make myself an essential part of a team
for the flippers that that are
working with me and that are using me as
their
realter and I've got experience in this
so I know what I'm looking at and I know
basically I can basically assess the
property on my own and then my client
needs to assess it and and we can
compare notes and then go from there but
I try to understand the types of of
properties that profile for my client
and then I send them those types of
properties and that's kind of that's
kind of how it works and that's the
beauty of doing this is that there's a
subjectivity to it and as I get to know
my clients better the ones that are
investors I can send them better and
better houses that are more closely fit
their criteria
and hopefully if you're listening to
this and you could use a realtor that
understands investment that understands
flipping houses you're going to go to my
show notes and you're going to look at
my contact information you're going to
shoot me a text or give me a call or
send me an email I'd love to talk to you
and and I love talking to all you
guys regardless of whether you're
investors or not so keep my information
handy I'm always available I hope you
guys have a great rest of the week and
stay safe we got past all that range
this past weekend that blew up from
the hurricane I think we're going to
have some nice weather here for the next
little bit let's enjoy it and let's have
a good rest of October
[Music]