This weekend Spike TV's "Flip Men" returns to the airwaves for a second season of housing hijinks. Previews are already promising an entertaining season that will include bees, a drug den, and a hoarder's haven.
If viewers are lucky, they'll see TV stars Doug Clark and Mike Baird battle their way to turning a profit -- which is particularly difficult in today's housing market. In preparation for the show's new season, Movoto Real Estate reached out to Clark to learn how budding house flippers can get into the game without losing their savings. Below is advice from one half from the TV duo.
Know Your Audience
When you're considering forking over a hefty chunk of pocket change, it's best to be patient. In a single week Clark and Baird research 500 to 1,000 houses and select only a small percentage of these to bid on at auctions.
"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."
Forget Location, Learn the Numbers
In their quest to turn a profit as quickly as possible, the house flipping duo have tossed aside one of the real estate's most well-known mottos -- location, location, location.
When asked how a home's location factors into his decision to purchase, Clark laughed lightheartedly. "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."
Master Your Neighborhood
For those considering jumping into the business, Clark urged to start local and small. Clark said that real estate is a hyperlocal business with its own microclimates. For this reason it's best to stick to a familiar neighborhood, preferably one that you live in. After all, you'll know the people in the neighborhood and more importantly the people who want to move to the neighborhood.
In Clark and Baird's case, they spent hours memorizing a neighborhood's associated real estate value. They made a game of it by driving around and trying to guess the value of houses. Of course, they're professionals.
"I think people know their areas better than anyone else," he said.
In the same vein, Baird 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.
Make a Bid
Most people's idea of a housing auction is a lightning-fast man clutching a gavel and bidding wars. While the second part might be true, auctions aren't the highbrow affair some might think. They are as likely to take place on the front steps of a courthouse as in a crowded lobby.
Clark suggested that house hunters study the title carefully. What would-be buyers at a housing auction bid on is a piece of paper that describes a particular patch of land. He said It's easy to buy something that's much different than what you imagined.
Know Your Competition
Once you've managed to dodge the minefield of purchasing a house, the next part is renovating and selling the property. When it comes to putting a house on the market, Clark suggested studying your competition. This could means trips to local open houses.
The goal, Clark said, is to put a house on the market that is similar to other homes in the areas. In other words, the house needs to be in better shape, but with a lower price tag.
He also said to skip fancy designs and paints. Keep the house neutral in design and add 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."
New episodes of "Flip Men" air at 10 and 10:30 p.m. on Sundays. For more information on the housing hunting team visit their website.