If you know anything about the housing industry it’s probably that it’s in the slumps, and has been for longer than anyone cares to remember. Homes just aren’t selling the way they did at the height of the housing bubble–or anywhere close to it, in fact.
That’s one reason Movoto Real Estate staffers have watched Spike TV’s “Flip Men” with such enthusiasm. We just don’t get how stars Doug Clark and Mike Baird manage to thrive flipping houses in such a distraught market. (It also doesn’t hurt that the two Salt Lake City investors find themselves in one pickle after another.)
This week Clark and Baird make their return to the small screen for a second season. Avid viewers have been promised hijinks that include bees, a drug den, and a hoarder’s haven.
In preparation for the show’s new season, and to satisfy our curiosity, Movoto asked Clark for tips on how to hang up our keyboards and start flipping houses.
It’s Not About You
The first thing budding house flippers need to know is to be patient, even more patient than you are thinking. In a single week Clark and Baird research 500 to 1,000 houses and select only a small percentage of these to attempt to purchase in an auction.
“We can wake up in the morning, look at 100 houses, and buy four,” Clark said in a phone interview. “What we really do is turn down homes. I think (people) don’t realize how many ‘no’s’ I say to houses.”
It’s Not About Location
In their quest for deals, the pair have tossed aside one of the real estate’s most vaunted mantras—location, location, location.
When asked about how a potential property’s location affects his decision, Clark laughed. “Do I care about it?” Clark asked. “No. To me it’s price, price, price. What I’m looking for is a deal. I’m not picking it to live in. I’m just picking an asset and a dollar amount.”
“I’ve made far more money in areas that I don’t even want to walk into than ones I would want to live in.”
For beginners, Clark said to stay close to home; after all, real estate is hyperlocal. The better you know a place, the more likely you’ll know what people in the area, and more importantly people moving to the area, will want.
In Clark and Baird’s case, they spent hours memorizing a neighborhood’s associated real estate value.
Of course, they’re professionals.
“I think people know their areas better than anyone else,” he said.
In the same vein, Clark suggested new house flippers purchase a piece of property for $50,000. Afterward, do $20,000 worth of improvements and sell it for slightly more than $100,000.
People have an idea that auctions take place with fast-talking men inside a courthouse. In reality, they’re quick affairs just as likely to take place on the front steps of a courthouse as a bustling lobby.
Clark suggests that would-be house hunters make sure to study the title carefully. What you are buying is a piece of paper that describes a particular patch of land. It’s easy to get burned or accidentally purchase something much different than you thought.
Of course, some house flippers have one advantage–if you’re in Salt Lake City. The industrious will watch Clark and Baird to see if they are bidding on a house.
“It’s not like we can walk down and sneak in a deal anymore,” Clark said.
Know Your Competition
Once your new house is renovated and ready to go on market, it’s important to scope out the competition. At times Baird and Clark visit similar homes in the area. It’s important to remember that you aren’t competing against every house in a given area, but houses in a specific price range.
In other words, the house needs to be in similar, or better shape, with a lower price tag. One way to accomplish this is to keep the house neutral in design with up-to-date features. From here it’s making a house livable—even if no one lives there.
“We stage every single property,” Clark said, referring to the practice of making a home appear lived in. “We put in furniture and all the ornate stuff.”
“What we do is simple: we just make sure we are nicer than our competition,” he said. “I always refer to it as dating.”
Be Your Own Agent
After you’ve put your house on the market and found a buyer, it’s time to wade through the complicated agent process.
Luckily, the team saw this hurdle early on. Baird became a real estate agent.
“For a few hundred dollars and few nights and weekends, I think a real estate education is the best thing you can do,” he said. “If you buy or sell one house in your life you’ve more than paid for it.”
Two new episodes of “Flip Men” will air at 10 and 10: 30 p.m. on Sunday, August 5. For more information the housing hunting team visit their website.
Editors Note: For a chance to win a Spike TV T-shirt check out Movoto Real Estate’s Facebook page.