Smart, Confident, Flippers Grow REI Business for Long Term Success!
Meet Jennifer & Lou
Jennifer works in healthcare in New Jersey but has a passion for flipping houses on the side. Although she has a very intense full-time job, the enjoyment, and payout, she and her husband Lou get from her real estate investments makes it worth the effort. They are successful time after time because they stay focused locally and reinvest in the business when they see opportunity -- recently branching out to include not only SFH’s but also vacation rentals.
Their Support System Matters
Jennifer and Lou have a great support system in place that helps them be successful. On a personal level, Lou is a skilled renovator and pitches in on the rehab. His schedule allows him to oversee the projects while Jennifer is at work. It helps that Jennifer focuses her property search to within their current home county so they don't have to travel long distances to the properties. Jennifer and Lou are very knowledgeable about the area, and don’t have to look very far for great deals. They are no strangers to auctions, foreclosures, and short sales, and have the patience and confidence to work through those often stressful negotiations.
Professionally, Jennifer and Lou have an ideal relationship with their general contractor. They originally met through word of mouth when Jennifer was looking for some help with projects on her own home. Being happy with his work and trustworthiness, the team turned to him when it came time to hire someone for the larger jobs at their flips. Being a generalist, the contractor was able to do most of the work himself. It’s a win-win relationship for the flippers and their contractor. They get exclusive access to his time, quality work at a reasonable cost, encouragement to continue to take on larger projects, and professional estimates on the rehab costs at potential flips. The contractor gets large, predictable jobs that are local -- and conveniently empty! (there’s no homeowner to worry about noise or dust).
Jennifer and Lou’s Most Recent House Flipping Success
Jennifer and Lou recently closed on a very unique property in New Jersey. Surrounded by much larger properties and some horse farms, they purchased a smaller home on about 4 acres of land from a bank that was holding the property in foreclosure.
This home was ideally situated for adding value. It had the unique feature of land with pastures, woods, a creek, and small horse barn and a smaller house that could be improved to more closely match the value of the properties around it. Because Jennifer and Lou were so familiar with the area, they knew there was a shortage of homes for small families in this area that has great schools and low property taxes. Positioning the rehabbed house as the perfect home for a family who wanted great schools and space for a horse or two, led them to get a full price offer 3 days after listing!
The house had a built in charm with its stone facade, but they were able to add significant value by finishing out the basement and making into more usable space for the buyers. They also totally rehabbed the mini-barn to maximize the attractiveness of the land that came with the home.
As with all flips, there were some hiccups along the way. The septic system needed about $15K more work than they anticipated. Because Jennifer and Lou were smart and built in a huge profit margin for themselves, this extra expense didn’t put them underwater on the flip.
Even up to the week before closing, there were some issues that had a financial impact. With a significant snowfall early in the week, four trees fell on the property and cost them an extra $1900 for removal.
Breakdown of Costs and Profits
Jennifer and Lou have been smart about slowly building on each success. They reinvest most of the profits from each project into the next property and are careful not to overextend themselves or their budget by taking on more than one property at a time. Instead, they are looking for larger opportunities with bigger profits. They are also in a good place financially to take advantage of opportunities when they see them. For example the couple recently purchased a vacation property in the Catskills (for investment) and also had the patience to wait over four months for a response from the bank on a four bedroom, colonial property in foreclosure. They finally got it though!
Jennifer and Lou’s Best House Flipping Tips:
- Research online to get to know the industry. Jennifer read many books and listened to many podcasts to get ready to make the leap with her first property. Although she says that helped her a lot, she also knows it’s important to overcome your fear at some point and dive in.
- Stay connected to the market. Jennifer says she enjoys browsing Zillow, auction sites, and the MLS listings while relaxing at night, looking for bargains and trends in the area. She’ll be the first to find a deal with that habit.
- Look into online brokers that allow you to list your own properties. After a few negative experiences with realtors, Jennifer decided to look into alternative ways of listing her finished properties. She currently uses and recommends Realmart.com -- paying a flat fee for each listing instead of a commision.
- The best way to buy at discount is to buy distressed--better profit margin and less competition for the property!