IS FLIPPING DEAD?

Video Closed Captioning:

good morning good afternoon good evening

folks michael zuber one rental at a time

back with his real estate entrepreneur

omar alfaro how you doing buddy good

what’s up michael what’s up everybody

how much buddy so again uh welcome baby

girl number three mr girl dad oh yeah mr

girl that’s right there you go

congratulations to you and your wife uh

video number two is going to come

straight from your instagram page invest

with omar i’m so glad to see you spin up

this page and really post more and more

content

uh

let’s talk about it is flipping dead

because if you’ve listened to my channel

you know i have a pretty negative impact

on the housing market transactions

crashing rates going up it’s a disaster

so i gotta ask dude is flipping dead

it

um it’s it’s to me it’s not

um you know it’s is it it’s for the most

or for the for the majority of people

out there that are trying to get into uh

in flipping because i am specifically

talking not to the seasoned ones i’ve

been doing it for 10 15 20 years okay

i’m talking about the

flipping that is that just got started

the flipper that just got started as a

two years ago yeah as of 36 months ago

even a year before the uh before 2020 um

there’s been a lot of changes obviously

like you’re like you came you came in in

2019 like okay i’m brand new i’m a new

flipper

and then all of a sudden in 2020 you’re

you became a professional yeah

you could do no wrong you could do

exactly like i’m you know i’m grabbing

every single thing that you can get and

flipping it and making a crazy profit

you know the market helped you there so

i would say there’s two parts to this um

is flipping dead in some cases it should

be

it should be in people’s perspectives if

you’re not ready for it

but the other avenue is i think it’s not

dead because you’re still able to

provide the solution the seller uh

remember when you flip a property your

profits made at the purchase absolutely

your profits always made up the purchase

because you have to factor in

you know the the volatility of the

market if it’s going to go down if you

have more competition if it’s specific

area location whatever the case is so i

really want to say that um

it’s not

but you have to it’s going to be

asterick because you have to really know

like your exit strategy up front you

really have to know you know what margin

you’re at i mean if you’re if you’re

doing it for twenty thousand dollars let

me just take you down one road real

quick

if if you’re doing it for fifteen to

twenty thousand dollars on a flip okay

that’s a lot of capital that you’re

putting into to receive a small minimum

amount

and and i’m talking to the real estate

professionals the agencies out there um

if you hone in on your crap you can go

get a you know a 14 or 13 000 commission

check and go do two listings and that’s

a lot safer than a flip because the

minute you think you’re gonna do it

that’s where it’s gonna punch you in the

face and

guess what’s gonna happen you’re gonna

make five grand you’re gonna make a

negative and if you break even consider

that a win because

this is what’s happening right now in

this in in in my current area i can’t

speak for everybody else’s but

in my spot yeah so

i love this topic so i guess from where

i’m sitting kind of talking to all

different skill levels i want to be very

clear i think flipping is dead for most

of you

you know you don’t have to like that but

that’s what i think

uh i’m lucky enough to talk to four very

successful flippers on my channel every

week yourself included

this is my

kind of summary

of what all of you are doing

one you have all tightened up your buy

box

right some of you

over the last couple of years you

started going farther and farther away

because you had too much competition at

home

all of you seem to be

tightening up location

second i am not currently talking to

anybody who’s flipping above the median

half of the guys half of the teams that

i’ve spoken with

about half their business was above the

median in 2020 and 2021

all of them have cut that out all of

them have projects a couple of them are

finishing projects they won’t touch it

again so everybody’s going super safe

three

they are they’re in buyer

most of most people now when they are

designing their their their end product

their target is an fha buyer yep all day

right so again an fha flip is very

different than a

you know dual income high income net

worth you know buyer very different

fourth

um most of the flippers i’m working with

now in their arv calculation

are now including

three percent seller credits on the exit

100

so like hey if my arv is 300 on the exit

i have to whack ni i i’m planning to

spend nine grand and if you don’t it’s

profit but they’re all penciling this in

and then lastly

and most importantly

every flipper i speak with

is taking current arvs which they’ve

counted on for years and whacking them

15

all day

great spot

so again think about all and now most of

you heard that list and you’re like

michael i can’t make my deals work

go back to point number one

most of you should not be flipping today

you can’t do all of that stop

you’re good why why do a flip to lose

money

it’s not worth the aggravation there are

many of you that are in flips right now

that you are going to lose money and you

won’t take the small loss the biggest

mistake a lot of my flippers who were

making big money last time

a couple of you didn’t take the 20k loss

and you ended up losing 100k

oh

100 and you think that like okay

michael you know what maybe you haven’t

lost a lot on any flips you which but

you do have norris drive which is your

alligator oh yeah

i made plenty of mistakes i’ve only

flipped for two years and they were the

best years and the market made me

straight up right okay

i got caught obviously and i’ll be

honest with you this whole arv thing

okay my arb was only at like five or ten

percent under uh this was you know four

months ago

and

i saw something coming but i also saw

like okay well there’s still no

inventory in this specific area

so

long story short now i’m on the market

and i just cut one of my properties by

20

and it’s still not moving so you just

mentioned taking this small 10 or 15 000

loss to move the product to move your

inventory and then readjust and make it

up on the next one that’s exactly what’s

happening right now and that and i’m not

gonna lie that when it comes to

investing over the last you know 12 15

years

you want to get to a point where you

where you lose hundreds of thousands

because you’ll make millions

you’ll lose thousands to make hundreds

of thousands does that make sense and i

want you guys to really pinpoint that

well michael was saying just now about

the arv

everybody i’ve been factoring closing

cost credit

before this thing even like had uh you

know

the the it had the the workings of like

something’s happening right so i started

giving away closing costs credit people

were asking me why i’m like because i

want my product to be gone yeah i bought

it off the books exactly right and some

of them now i’ll tell you this right now

if i didn’t give them closing cost

credit they i would still be on the

market

exactly and then

in a problem

and i got out still making you know

close to the the the six

six digits but

on on a couple of these

but if i didn’t i’d be you know 45k

yeah again you’ve again i want to go

back to the question in the hand is

flipping dead and i’m going to be very

clear for most of you the answer is yes

90 yes and the second

you guys you guys are not changing

you’re buying it is all made at the

purchase

if you are not factoring in again i want

you to these are the best and the best i

had the best flippers in my market on my

channel last weekend of the week before

evc homes shout out aaron and cletus

they’re like michael a we’re not doing

million dollar flips anymore which again

in my market is 2x the median these guys

are rock stars they’re doing a million

dollar like one and a half million

dollar flips like not doing that again

two michael we are factoring in three

percent closing costs every time into

our numbers three we are taking our arvs

which we are really really good at

really really good at and we are

whacking them 15

and if we can’t get the numbers to work

we’ll just wait

so again the last thing i would say

about flippers if you are going to keep

moving forward like omar

make your portfolio smaller

don’t risk as much

the next 18 months are going to be very

very interesting in housing

again your market dude you could see a

50 crash in transactions easy

and and that right there is gonna be

insane

yeah think about that does to your day

business your flip business and again

the beauty of all of this

is you the real estate entrepreneur you

will come out of this stronger you will

take a couple of l’s

because you got as it pivoted you will

be much better through this and you come

out the other end all these wannabe

flippers these one and dones they will

be long they will be baristas at

starbucks

you’re calling it yeah so it’s gonna be

a lot of fun watching you man

it’s it’s cool i i definitely want to

add another you know view to the

portfolio this is where creative

financing is going to come into play

absolutely

you know and that’s something we can

talk about in another video there you go

thanks buddy where can people find you

and what’s your id ig page that had this

great topic

uh invest with omar that’s the new ig

page go follow me there and um look for

all the real estate info there you go

thanks buddy you’re welcome

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