Flipping Real Estate: A Rev N You Reader’s Tale

Rev N You Man

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.

Six months after they started work on the house, they were finally ready to sell the property. But, thanks to delays, the sale landed smack in the middle of summer which is just about the worst time to try and sell a house. Every day the house remained unsold meant additional carrying costs (financing, hydro, heat, taxes, insurance, etc.), so waiting for the fall market to hit was financially not an option. As for the neighbour who agreed to split the cost of a beautiful new fence that separated the two properties? Let’s just say Susan and her partners are still trying to recoup the neighbours half of the fence. Unfortunately, our “word” no longer is good enough. Get it in writing folks!

It was stressful, time intensive and a lot of work. So, why bother with doing a flip? Well, Susan says they did make a decent profit (about a 10% return on investment in about 8 months). And, she enjoyed the opportunity to be creative and handy! Susan said she loves interior decorating and seeing the fruits of her labour. Turning an ugly duckling into a shimmering Swan is a thing of beauty. It also gave her ideas as to what she would like to do with her own home. And, for those who like shopping – be it for doors, windows, faucets, door knobs or curtains – it’s a great excuse to check out all the latest trends at Home Depot, Ikea, or Rona!

Susan gave us 4 Do’s and Don’ts of Flipping Real Estate:


[list style=”orb” color=”grey”]

  • Have a detailed, set budget with a healthy contingency;
  • Get 3 or more quotes on all jobs;
  • Get permits for all work to be completed; and
  • Have a detailed partnership agreement from the beginning.


[list style=”orb” color=”grey”]

  • Don’t sell in the Summer or launch on a long weekend;
  • Never assume that a carpenter can do drywall taping or plumbing;
  • Do not let the trades people pit the owners against one another; and
  • Don’t get greedy when selling…often the first offer is the best!


It wasn’t a bomb, but it was a bigger challenge with a lower pay out than she expected. Will Susan complete another Flip project?

She has every intention to, although it may be a few months or a year until she is ready to jump back into it. Besides her great advice above, she said it is very, VERY important to hire the right people. Just because General Contractor X is cheaper than General Contractor Y doesn’t mean you will profit more in the end because you “saved” some cash. The old phrase exists for the housing industry just like anywhere else – you get what you pay for!

9 Tips for Success with Flipping Real Estate

by Julie Broad

    1. If we are going to go to all the work to renovate a place, we want to reap the benefits for years to come. When we renovate we do it with renters in mind, not future home owners. But, if we were going to pursue a hobby or business in flipping here are some things we would consider when looking at a house:
    2. My requirement for a home to live in, and a good rental property would probably hold true in this case too: Find the Starbucks area
    3. Find the ugly house on a street of well maintained homes.
    4. Know your prospective buyer – are you fixing the house up to suit a young family, an urban couple, or someone whose kids have left the nest? Figure out who is most likely to move into that area, and renovate to suit their needs.
    5. Where is your biggest place to add value? If you can easily enlarge the kitchen or make it more functional then you can add a lot of value to the home quickly. You can also consider adding a bathroom or creating more storage as ways to add value.
    6. Inspect the house carefully. Have there been renovations done on the property? You will often pay a premium for previous renovations, and in so many cases you will end up having to redo what was done before so it costs you more for the house, and to do the work.
    7. Determine your budget, and then add an additional 30 – 40%. Things always cost more and take longer than you expect.
    8. Find a real estate agent that has flipped houses themselves, or that has a few clients that have done it. And, ask for references. A good agent will go a long way to helping you understand the needs of your prospective buyers, and in getting the price you want for your house.
    9. Talk to a mortgage broker about your financing options. There are plenty of financing options to suit a flipper purchase.

*Not her real name. She has asked to remain anonymous, but will answer questions through us if you are interested in learning more.

Send Us A Message

If you have questions about points raised in this post, or if you’d like to learn more, then send us a message and we’ll get back to you as soon as we can.

Item added to cart.
0 items - $0.00