Mom and Dad love watching those house flipping shows. Almost any weekend that I go visit them, they’ll have at least one show running somewhere in the house. They have three TV sets. The business of house flipping seems very attractive. It’s a lot of hard work. First you must find the property. Then you have to buy it. Then you have to renovate it. Then you have to sell it. And make a profit.
Flipping became all the rage after the Great Recession. I know there are books and forums where you can learn how to do this. I asked Dad why he never tried to get into the flipping business. He used to build houses. He laughs every time I bring this up. It’s not as easy as it looks on TV, sweetheart! I know, Dad. But you have an advantage over someone like me.
Dad was a crew chief for a developer for 10 years. He can fix anything that breaks. When Mom and Dad are ready to retire you know they’ll get a good price for their house. They plan to move to a cottage in the country. They have already chosen the county where they want to live. It’s so far away from the city.
House flipping isn’t like flipping burgers. That’s what Dad says. I thought he was being condescending when he first said that. He wasn’t talking to me. My boyfriend and I were watching one of their shows with them. Steve asked why Dad didn’t get into that business. It looked like it was really profitable. They spent the afternoon talking about the ups and downs of repairing houses. Dad does inspections now. He says a lot of houses fall out of code after a few years. People don’t know how to keep them up.
When you’re cooking the rules never change. 20 years ago if you needed to cook a hamburger you had to heat it to 160 degrees Fahrenheit. If you cook a hamburger today you still need to heat it to 160 degrees. That never changes. But the housing code is upgraded every few years. Older houses may be really outdated. Or you may find a house that has been partially upgraded.
The problem with some homes is that they weren’t designed with modern codes in mind. It’s a lot of work to bring a poorly designed house up to code. It’s often better to tear it down and build a new one.
Now add to all that work the cost of buying and renovating the property. It’s not like buying a new home. You can’t just go to the bank and take out a house flipping loan. This is something I didn’t realize until Dad explained it to me. He said if you don’t know the right people you have to finance the project on your own. According to this article on Communizine, there is a hidden industry of financiers who provide the money for serious flippers. All those seminars you see advertised where you learn how to flip houses are barely more than a scam. They’ll ask you to think of ways you could get money right now. And that way they size you up and learn how much more of their lessons they can sell you.
Some people have been burned by the house flipping craze. I don’t know anyone who tried it. I guess Dad scared all his friends away from the idea. My friends don’t have the money to try it. Not everyone believes in it. This blogger says house flipping is a fairy tale. I disagree. It’s a big business and any big business is dominated by big players.
Since I’ve never renovated a house I’ll keep my opinion on how hard it is to myself. I will look for different ways to invest in my future. Maybe one day I will own a rental property. I never fancied myself a rental property owner. That sounds like a lot of responsibility.