Oh yeah. It’s not all glitz and glamour. Flipping houses has a dark side that people would rather just ignore. Everyone loves to talk about the big bucks and home run deals they are doing.
There are things that are not being shared. Things that make your skin crawl and your stomach turn. If you are going to make a serious go of this business it’s best you know about the good, the bad and the extremely ugly.
The good is the freedom and money to be made. The ugly is the ugly houses. The bad is what I am sharing here. Those of you in the trenches may have flashbacks. It’s all funny after the fact when you’re not experiencing it any longer.
First, have you joined our private FlippingJunkie facebook group? Come network with us!
Here are 7 of the not-so-glamorous aspects of flipping houses as experienced by yours truly.
Have I mentioned before that I REALLY HATE FLEAS! Just typing this makes my skin crawl.
Something about a vacant house makes them multiply at insane rates. It’s actually pretty incredible.
Just a couple of weeks ago I was looking at a house. The seller and I had been walking from the living room, through the kitchen and into the hallway, when I noticed the sure sign of a major problem.
From the vantage point of the hallway, I was able to glance quickly into two bedrooms. In the center of each bedroom was a small canister.
The flea bomb.
Immediately, I asked the seller when the bombs had been set off as I instinctively bent over to look at the bottoms of my jeans and shoes.
The answer came from both senses as I spotted the black specks of terror and heard the response from the seller. He had just bombed the house the night before.
I don’t think it did any good. He must have gone with the cheap stuff from the dollar store or something.
Those damned little buggers were already scaling me and finding the most annoying places to burrow. With the thought of that happening, I quickly stormed through the rest of the house glancing quickly at everything and making mental notes of what was needed.
Outside the flea dance commenced for about 15 minutes as we talked numbers. I’m sure the seller felt the upper hand as I was busy zeroing in each little f-ing flea.
I ended up buying that house and have yet to be back over there to set off some more bombs. I’m going to have to face them tomorrow. Gonna have to put on my commando gear and scare the neighbors. 🙂
The Prius with the emblem on the side. Keep an eye out for it.
It’s not that we intentionally do things wrong, it’s that they seem to want to find a way to make it seem that we have.
Ok. Maybe I’m exaggerating a little. They’re not that bad (just in case they are following the blog…)
We’ve had some issues with code compliance in the past but nothing ever seemed more than just a hassle, so don’t let this scare you away from rehabbing.
A recent event involved a house that was the ugliest on the street. We were in the process of making it one of the nicest in the neighborhood (in our opinion at least) when I get a call from my contractor.
Code compliance had just come by. Their reason for the friendly visit was that there was a shed in the backyard that was too close to the lot lines. The shed looks like it was put up at least a year or more ago. The neighbor (a little foreshadowing for the next item in my list) decided now was a good time to call and report the issue with the city.
Forget the fact that we were doing them a big favor and would have dealt with it had the neighbor just mentioned their issue with us.
But, back to my focus on code compliance. The problem I had with them was that they wanted me to jump through a bunch of hoops over the matter. I was to relocate the large shed or tear it down. Not only did I have to do that, but I also had to report what I was doing and when with them each step of the way. Just ridiculous.
Just let me do what you are forcing me to do and call you when I’m done. Just another set back that has to be dealt with with a smile and just move on. After all, the payday will make it all worth it.
Maybe that’s too strong of a word. No, no it’s not. Just thought about a guy that I had an issue with not long after we got started in this business.
This guy was a real piece of work.
We were in the middle of a big rehab on a house. The house next door to the house we were working on was vacant. We needed to get a dumpster into the driveway but a large tree from the vacant house’s yard had branches that blocked the dumpster from being dropped off. I informed my contractor to cut the branches, but only to the property line, which was very obvious because there was a fence not far away that separated the two lots.
About a week or so later, I get a call from my contractor telling me that the neighbor just got finished chewing him out. He was extremely upset about the branches being cut…a little too upset.
According to him, the branches were cut about 2 feet over the property line. I made a trip over to the house to talk to him. My main objective was to try and be friendly and tell him that if he ever had a problem to call me instead of just chewing out my contractor.
This meeting ended with him telling me that these things are the reason why he keeps three attorneys on retainer.
Ok. So you’re that type.
Fast forward a month or so. The house is finished and we sell it. The new owner moves in and that’s when the fun starts. While I am out looking at houses a sheriff shows up to my house and scares the heck out of my wife. She thought at first that something had happened to me. He was just there to serve me.
We were being sued. Guess who was suing. Yep, the guy that got his panties all in a bunch over some branches being trimmed. A quick trip by the house showed me the extent of his madness. He had since butchered the tree. You wouldn’t believe how he destroyed that thing.
Guess he wanted to make a quick buck from us knowing that we had just sold the house. He figured we would just pay the small amount to just be done with him.
We did some digging and determined that he had not yet owned the house when the tree was cut. He had bought it as-is I’m sure and so bought it with the tree like that. I think we just had our attorney send a letter stating to basically ‘bring it on’ and it caused the guy to back off. We made it through that fiasco.
It doesn’t take a whole lot of visits to fixer-upper houses before you come across the dreaded ‘no-water-for-ages’ toilet. This is where the water has been cut off at a property for a while, yet people still feel the need to use it.
Yes, you read that right. One of the absolutely most disgusting things you will come across. And come across it you will.
The stinky refrigerator is also a favorite of house flippers. Something about locking in all of the putrid decomposition of food for a long period of time that really ripens it. 🙂
When the power is cut off and food remains in the refrigerator, it doesn’t take long before the smell will knock you over. Word of advice: if you go into a house that does not have power (or has a fridge that has been unplugged), you might want to reconsider looking inside.
We bought a burn-house that had such a refrigerator. It had been vacant for a while and the power had been cut off permanently when the fire occurred. I was there when the contractors were doing the demo.
Someone just had to look inside the fridge before moving it. Big mistake. It was only slightly open for a second but that smell quickly filled the HOUSE. Not just the room, but the house. And man was it foul!
Duct tape was quickly wrapped around it to prevent any further incidents.
You’ve got to be careful when using Craigslist sometimes. (maybe most of the time)
This is one of my favorites.
We had bought a house that had an above ground pool. The pool was rough. The water was dark green. I wasn’t sure if the liner needed to replaced or not and was trying to avoid that expense. We must not have known a reputable pool guy at the time because I had found one on craigslist that advertised that he cleaned pools.
I told him to go by the house and look at the pool. He called me back and told me that he could clean it without replacing the liner.
Great. Just saved some money and time…or so I thought.
He wanted to meet me in the parking lot of the pool supply store to pay for the materials to clean the pool. That should have been my first clue. He didn’t even have the money to buy the necessary materials. I figured they cost quite a bit because the pool was in rough shape and might need a lot.
So Melissa and I went up to meet this character. And now the funny part…
He rolls up next to my truck and rolls down the window halfway, slides his dark sunglasses slightly down and looks at me with his horribly bloodshot eyes. His girlfriend is in the passenger seat looking sickly. Now that he’s impressed me with his professional appearance and classy style (sarcasm of course), he asks for $20 cash to buy the cleaning materials.
Pump your brakes, son.
I just told him no thanks and we left. Didn’t feel like supporting his habit. Crazy.
It’s inevitable that you will end up getting some prank calls when you put your phone number out there advertising that you buy houses.
Don’t worry though, it is really pretty infrequent (probably once a year or so for me). I think it is more often when you put bandit signs out on a regular basis.
It’s not hard to tell when it’s a prank call. You can usually hear giggling in the background they always describe a real piece-of-junk house. Which is funny, because that is exactly what we buy. But they take it overboard and say it has 23 bathrooms and 2 bedrooms. So silly.
I love to just play along and see how long before they just give up. I’ll tell them I’m VERY interested and what is the address? How much are you asking? When can I see it? Is pier and beam or slab? Does it have knob and tube wiring? etc. etc.
The other side of this is having fun with other investors. I usually don’t go very long between calls where I tell an investor that I have a horse for sale. I could have sworn their sign said they buy horses.
Guess the guy from craigslist might fit this one. Not sure of his drug of choice.
If you invest in war zones, you will come across some real characters. It’s a given. I don’t recommend investing in war zones at any cost – bird-dogging the leads is fine – but taking ownership or even visiting these areas is ill-advised.
Don’t know what I was thinking, but I got a call for a steal of a deal in a war zone and decided to take Melissa, my wife, over there (as she was with me that day driving around). She’d never been to this part of town. I believe it is the absolute worst in San Antonio.
While driving down a residential street some guy literally darted out in front of my truck. I don’t even know where he came from. Must have been behind some bushes or something.
We did not hit him and only missed by inches. Melissa immediately informed me that I was to get her the hell out of there. I was not to stop at stop signs or red lights, I was to get her as far away from there as possible in the shortest amount of time.
I haven’t bothered to look at any other properties in that part of town since then.
Hope you enjoyed the dark side of flipping houses. Not sure why people don’t talk about these things more often…they’re really quite entertaining. 🙂
I’d really love to hear your stories of the ‘BAD’. I know you’ve got some. Go ahead, provide us with a good laugh or horror story in the comments below. I dare you.
-Danny JohnsonNext: 166: Corona and What Now
Great way to start my morning haha! My buddy was telling me how they were looking at a house down here in Mobile in a tough area. Half the time they’re wide open (this always worries me and I give plenty of shouts before entering these). Anyway, they were walking through and the house was full of stuff. In one of the bedrooms they literally stepped on a guy that was sleeping under a pile of blankets and whatnot. Ha, I think it scared the vagrant just as much as them!
That sounds like it would have been a startling situation. It’s always weird when you look at vacant houses where all of the previous occupants ‘stuff’ is still there. Makes you wonder what happened.
Saw a guy huddled, hiding in a closet in a house I was looking at one time. Felt it best to just leave. You never know what could happen.
I recently found your website as i have been working to educate myself on house flipping. I saw that you live in San Antonio, as well as I. I am currently in the military (with about half the city) and am planning on getting out soon. We just paid off all of our debt and have about $5K saved up right now. We are trying to save about $15K before we go looking seriously for our first flip. I have been searching around the past few weeks just seeing what the market is looking like. We should hit our $15K mark within the next 5-6 months and should be ready. I think what our range will be is to buy more in the 50 – 60K range in neighborhoods that still have a decent appraisal values like 100K. i am new to your site, do you have any articles specifically that you would recommend for first timers or people that are still in transition from career to house flipping investor? Thanks.
Glad to see another local on the site. You should start now and just focus on wholesaling/birddogging. You’d build up that 15k much faster and be learning by doing.
Check out this post if you haven’t already: http://www.flippingjunkie.com/2012/how-to-start-a-house-flipping-business-step-by-step
Not really “investing” horror stories, but I do have some nice ones about REO houses that we have listed.
There’s the call that the McMansion half an hour away has the fire sprinklers going off. The cleaning lady was panicked in the phone call. Sirens were blasting in the background. Images of peeling paint and sagging drywall were stuck in our heads the whole drive down there. Come to find out, it was an upstairs shower that was missing the head down to the wall. Water was running into the drywall.. and out the fire alarm downstairs.
Then there are multiple cases of “personal property”. I don’t know if the owners were horders, or just had their friends drop off trash to be vindictive. The pile in one house was over 4′ tall.. with a couch on top. The bank told us to search for “items of value”.
Then there was the “vacant” house. It had some light personal property in it, a mattress or two. As we were walking around inside.. there were weird noises coming from the attic. As if someone was up there. We got out of that house so fast, you wouldn’t believe it! XD
Great stories. Thanks for sharing.
Gotta love the “personal property”. The best part was about the couch being on top of the pile of garbage. I can only imagine how weird that looked.
Thats some funny stuff!! I’m completely new to the business and don’t have any stories to tell yet but I’m sure I’ll have some in years to come.
I’m reading this while on my lunch break and luckily I started reading #4 Dirty Toilets and Stinky Refrigerators after finishing my turkey sandwich! haha…
Thanks for sharing some of the bad REI stuff!
No problem. Glad you had finished your sandwich by that point as well. Good thing I didn’t use the picture of one of those toilets for the image for this article!
Here’s a good one. I was looking at a home owned by a father who had let his son and his friends live there(never a good thing). So it’s about 3 in the afternoon and the place is a dump, people still sleeping in rooms and a new puppy trotting about. All of a sudden the puppy takes a wiz right on the firepace platform and is prompty praised by the only awake person in the house… . Some folks:)
Too funny…and disturbing. Really makes you wonder how their lives are going to turn out.
I’ve seen this situation several times as well (parents letting kids live in the house with friends) and every time the place is a dump.
WOW, that is really very interesting stories. I would love to hear more of this. This is quite entertaining!
Thanks, James. There are a lot more where those came from.
You can say whatever you want about the house flipping business, but boring it is not. 🙂
Great stories Danny. I’ve experienced a lot of the same stories that you’ve shared over the years. One of my favorites was only a couple of months ago. I guy called me about his rental property that the tenants started a fire in the upstairs. The fire dept had cut a hole in the roof and flooded the house from top down. It was hot out when it happened and with the power cut off, the water created mold damage and floor buckling. I went to see it a couple months later with the water out of it. The tenants left everything behind including all of their food in the kitchen. When we got to the kitchen, I noticed black spots all over the plaster. Thinking it was mold, I shined my light a little closer realizing they were moving. It was roaches everywhere!! The seller opened a carton of eggs on the table that was filled to the brim with them! I cuffed my jeans up so I wouldn’t bring any of them home with me and left. I never ended up buying that one but got a good story out of it.
-A friend of mine who is another investor got hit hard in a flea house once. He told me that when he got out he actually stripped his clothes off right in the street and rode home!! Too funny.
-Keep up the great blog
Thanks for the stories, Ron. That one with the roaches is one to tell the grandkids! Man, that’s disgusting. Don’t know if you’ve noticed it, but every time a house has a lot of roaches there is this peculiar smell. You know what I’m talking about? It’s weird.
I went to bomb the house again today. Only about 5 fleas spotted this time, but I was speed walking through the house on a single missile to place bombs and get the heck out of there.
lmao, this is better than a (good) sitcom! Thanks so much ;>
Thanks for clarifying that it’s better than a ‘good’ sitcom. We all know there a lot
‘bad’ ‘horrible’ sitcoms out there!
I know the smell you speak of!
-I also invest in mobile homes. I bought one a few years back from the park owner that I do business in. They evicted the tenant and repossessed the home. The house was trashed. There was a hole the size of a basketball in the bathroom floor in front of the toilet. After talking to the neighbors I learned that they had all utilities off for some time. They fit the 5 gallon pale in the floor and used it for their toilet. They would dump it behind the neighbor’s trailer and stole water off their spicket to rinse out, and use water for their dishes, etc. I can’t make this stuff up..I did buy the house for $200 so it was worth it.
Woah. That’s pretty disgusting!
Heck, the story alone was worth the $200.
Thanks for sharing, Ron.
Well I have one I called the Hoarding Stinky House. The lady was a real hoarder, her house was literally filled with stuff everywhere. But what made it also memorable was she had cats and a dog. She was very embarrassed and said she had not let anyone in the house in years including neighbors. When we got to the front door she told me she felt very bad and to brace myself. Well it was horribly disgusting. Super stench. There were piles of feces everywhere including big piles in the kitchen. She barely lived there but she did sleep there. Icky. I wholesaled this house and my buyer said she was there for days as they took all the crap out of the house. As they put stuff in the dumpster she was taking items out and keeping them and was so thrilled that they were doing all the work. She found stuff that had been buried back from her childhood. My buyer said he never saw anything like that before and was basically dumfounded.
In addition, in Northern NJ what is very difficult is everyone uses a lawyer for RE transactions. My latest dust up with a lawyer was he did’nt like my terms and 10. deposit. He demanded a 5000. option fee. I always have good rapport with my sellers and he agreed with me to go with my original terms overruling his lawyer. I sold that with in one week. He was happy with me.
Another one started with a lawyer writing a letter to my lawyer accusing me of fraud for wanting to do a simultaneous closing. My lawyer was incensed since she represented me and he was also accusing her of fraud. The buyer said in his and the lawyers world it was just the way they do business. I said to the buyer your world sucks and unless you get a different lawyer you can’t buy this house. He said he was loyal to him since he took 9 MONTHS to negotiate a deal for him. Do ya think that is a RED flag? He was out and I sold it the next day to someone else who was sane. lol
I could go on but….
Great stories. I really enjoyed reading about these. Lawyers can be a real pain in the ass. So glad to hear that you stuck to your guns. Something about their (not all of them granted) acting all high and mighty all the time rubs me the wrong way.
Go ahead an continue if you want, I’d love to hear more.
Thanks for sharing.
Touring REO’s looking for my current home (soon to market, “education” house) I was looking at a wet basement house. There were strange “candles” upright on the carpet. I picked one up and found it was 6″ tall fungus shoots.
Another was a crazy cheap three story house in a decent area. From the outside I felt like my equilibrium was slightly “off” while looking at it. Once inside, I found that a tennis ball would have rolled around the entire house it was so tilted and shifted. The third floor was a scene out of “Seven” and “The Birds”. There was a one bedroom unit that had not been accessed in at least 20 years. The bird feces was piled up knee high.
3 years later it sits vacant and for sale…..
Brady, why hasn’t anyone gotten a steal on that house—even if only for the land?
Seems like if you could get it cheap enough this is a quick flip to a rehabber who knows his/her stuff.
Some rehabbers I know drool over the possibilities of such a deal——it’s still a deal after rehab costs.
Great fun story ;>
Thanks for sharing Brady.
Those fungus shoots sound disgusting!
I agree with Melodee. Why not have a foundation/structural guy come out there and tell you if it can be corrected and for how much. Sounds like potential to me…at least for a wholesale if you don’t want to take on that big of a project.
I have one related to the stinky toilets that’s ALSO a reminder to check on your contractors…even when you know them…
My partner bought a house for rental that we looked at. Needed VERY minimal work, just little things to get ready for a tenant. At some point, one of the contractor’ s people left a surprise in the toilet…unbeknownst to us until a prospective tenant let us know after they walked the house. Yuck! And makes us look pretty sh*tty, literally 🙂
LOL. Thanks for sharing Shane. That’s disgusting.
I’ve actually had a guy do his business on the side yard of the house. Now mind you, there was only about 3 feet from the fence to the house and a lot of people had to walk to the back that way. Nobody saw him do it, but we all knew.