Flipping Real Estate

The Flipper Story: A Rev N You Readers Recent Tale

by Dave Peniuk     

Susan* and her two partners hit the streets in Toronto earlier in 2007 to find a payday by flipping real estate. Their mission: to find a really beat up house in an up and coming Toronto neighbourhood, fix it up and sell it within 5 months.

The three of them wanted to gut the property and renovate just about everything in the house. They expected to do all the big jobs from ripping out walls, redoing the plumbing and wiring, to putting on the finishing touches! Unfortunately, Susan tells us the "planning" was A LOT easier than the "doing".

Flipping Real Estate Sounds Easier Than It Is

This wasn't their first reno project. Susan and her two partners had undertook a smaller project in early '06. With that experience under their belt, they decided to take it up a notch with this project. The house they found was in need of a large scale renovation. They purchased it using some cash and an Open Variable 5 year mortgage (the rate and payment floats with the Prime rate and there is no penalty for paying the mortgage out within the 5 year term). They anticipated it would take approximately 4 months to complete the work and a few weeks on the market to sell - it was going to be a masterpiece!

Well Murphy's Law was busy during this project. The basement flooded due to shoddy, unlicensed "plumbers" cutting the water main line inside the house. The dumpster bin outside the house was being filled by neighbours while the walls were ripped out over a painfully slow 3 weeks (and the neighbours didn't help pay for the extra costs of the garbage). And the best part, during the delays and stress, the workers were playing the partners against each other! One would say "Jack said it was okay that we do this with the wiring", while Susan was trying to say "this is not how we agreed to do this"! And when they finally were done most of the work, and were almost 2 months past their planned completion date, the building inspector went on vacation leaving them to wait a couple of more weeks for his return.

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