1. FLIPPING HOUSES

2. Knowledge Foundation
Books:
 “Flip: How to Find, Fix and Sell Houses for Profit” by Rick
Villani
 “Find It, Fix It, Flip It!: Make Millions in Real Estate-One
House at a Time” by Michael Corbett
TV Shows:
 Flipping Boston
 Property Brothers
 Flip or Flop

3. Agenda
1. Part 1: How to Find the Right House
2. Part 2: How to Fix the Property
3. Part 3: How to Flip the Property for Profit
4. Part 4: New Local Flipping Fund

4. Part 1: How to Find It

5. Where to Look: Neighborhoods
 “Buy the worst house on the best block”
 Target neighborhoods and become experts in them
 Should be close to you for travel purposes
 Definition of good neighborhood: Good schools, well-maintained front lawns,
garbage under control, low crime rate, 15-20% of homes recently fixed up, R-1
Zoning (single family, no apartment buildings), lots or real estate activity, more than
75% of sales to owner occupants, accessibility to stores and services, strong
homeowners association
 Also try:
 Fringe neighborhoods to good neighborhoods
 Neighborhoods in Transition (New stores, renovation projects, etc.)
 Older neighborhoods
 Be wary of houses in newly developed cookie cutter communities (hard to make your
flip stand out and not enough to need big improvements)
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

6. Types of Houses
“Cosmetic
Fixer”
“Teardown
”
“Downright
Ugly
House”
Source: “Find It, Fix It, Flip It!”
• Structural problems that are beyond
repair economically (Foundations not on
slab or concrete, Major shifting, bad floor
plan requiring room addition, truss
damage to the roof, major fire damage,
illegal room additions)
• Geological Problems that you can’t
overcome (severe earthquake damage,
unstable hillside near house, slipping or
shifting due to soil erosion)
• Environmental problems to run from
(asbestos ducting, mold, faulty septic
system or long sewer line to street, high
levels of radon)
• No curb appeal, but lots of potential
• Great bones
• Little or no landscape
• Maybe a few structural problems (i.e.
sagging foundation)
• Dark interiors with drapes/blinds
• Upgrades needed in house systems
• Dated kitchens/bathrooms
• Rotting subfloors
• Leaks in roof
• Lots of small rooms
•Just needs a bit of cleanup, paint,
landscape, redo the floors, scour
the kitchens/bath with new
appliances
Fix It
Find It
Flip It
New Fund
Flipper’s
Target

7. Doing the Search
MLS (Realtor Access Only):
 Identify average price per sq. foot and
the range of prices for different houses
 Check expired/canceled listing report
 Days on market report – target houses
that have been on market for a while
 Do a keyword search on relevant
keywords: “handyman special’, “needs
work/updating/TLC”, “Repair
allowance”, “Assumable”,
“Undervalue”, “Deal”, “As is”,
“Motivated Seller”, “VLB (Vacant on
lock box)”, “Estate sale”
 Set up daily alerts (need to get before
others)
Other:
 Searching in classifieds (such as
craigslist.org): Look for keywords like:
“Handyman special”, “Vacant”, “Motivated
seller”, “Must sell”, “As is”, “Needs work”,
“Fixer upper”, “Estate sale”, “Needs
updating”, “Great neighborhood”,
“Charming”
 Search the Internet for “For Sale By
Owner” and then your city to see other
listing sites
 Hit the streets and note down any vacant
or run down properties and look up the
property owner and contact information in
Tax Rolls/property tax records and
contact directly with letter or phone call
Fix It
Find It
Flip It
New Fund
Source: “Flip: How to Find, Fix and Sell Houses for Profit”

8. How to Choose the Right House
 Calculate your Profit Up Front:
Estimated Final Flipped Price: _________
- Purchase Price of Home: _________
- Purchase Closing Costs: _________
- Estimated Fixit Costs: _________
- Carrying Costs: _________
- 10% Buffer: _________
- Sale Closing Costs: _________
- Capital Gains Tax: _________
End Profit: _________
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

9. Final Flipped Price
 In order to figure out the final selling price follow four steps:
1. Pull the comps
 Find similar houses in MLS that were: 1) sold recently (last 3-6 months),
2) same neighborhood, 3) same size (+- 500sf), 4) same age (+- 10
years), 5) same bed/bath (+- 1 bed/bath)
2. Drive the comps
 Based on visual factors rate each comparable with +1 (better than ours),
-1 (worse than ours) or 0 (same).
3. Read the market
 Future changes in housing prices
4. Check with experts
 Average your comps to get an approximate $ per s.f. and
average selling price
Fix It
Find It
Flip It
New Fund
Source: “Flip: How to Find, Fix and Sell Houses for Profit”

10. Other Variables
 Purchase Closing Costs:
 Title insurance, inspection, survey, appraisal and documentation
 Usually ~1.5% of purchase price
 Carrying Costs:
 Property taxes, insurance, utilities and maintenance costs
 Usually ~1.5% of purchase price
 Sale Closing Costs:
 Real estate agent commissions, closing title, survey, appraisal, etc.
 Usually ~7% of selling price
 Profit:
 Should be 10 to 20 percent of final selling price
 Plus risk associated with rehab complexity (generally base 10% profit plus 1% for
each $5/s.f in improvement costs)
Fix It
Find It
Flip It
New Fund
Source: “Flip: How to Find, Fix and Sell Houses for Profit”

11. Tax & Legal Costs
 Work with an Accountant:
 Pocket up to $500,000 in profit tax free if married couple hold
your property for two years or more and it has been your primary
residence
 Keep up to $250,000 tax free if you are single
 Less or even no capital gains on $250-$500K if you move from
your primary residence before 2 years due to special
circumstances
 Own home for a year and a day, capital gains rate goes down
 Using Federal 1033 tax-deferred exchange program, sell a
property and roll your profit into the next one not matter how
short a time you’ve stayed there, and pay no tax on it
 One business setup (i.e. LLC) for all your flips or new business
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

12. Your Dream Team
 Key professionals needed:
 Real estate agent
 Lawyer
 Accountant
Fix It
Find It
Flip It
New Fund

13. Part 2: How to Fix It

14. What to Fix?
 Divide improvements into Must, Should and Could:
 Must: Absolutely required to sell
 Should: Usually flooring, countertops, trim, tile, lighting and paint
 Could: Amenities, openings, room conversions, additions, layout changes
 When choosing what improvements to make need to identify what
improvements are available in market and pricing constraints.
 Each improvement can be done at different design levels: Basic, Standard,
Designer or Custom finish level (www.flipthebook.com)
Source: “Flip: How to Find, Fix and Sell Houses for Profit”
Fix It
Find It
Flip It
New Fund

15. Cost Approximations ($/sf)
Basic Standard Designer
Make-Hab $3 $5 $7
Rehab $12 $15 $18
Remodel $20 $25 $30
Restructure $35 $40 $45
Fix It
Find It
Flip It
New Fund
Source: “Flip: How to Find, Fix and Sell Houses for Profit”

16. Basic Areas of Improvement
Outside:
 Curb appeal
 Landscaping
 Flowers
 Front Door
 Exterior painting
 Pathways and driveways
 Garage door
 Outdoor lighting
 Backyard & Grounds
Other Internal:
 Kitchen
 Master Bath and
Bathrooms
 Floors
 Walls & Ceilings
 Painting
Internal Systems:
 Electrical
 Plumbing
 Heating and
Air
 Roof
 Windows
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

17. Potential Lifestyle Upgrades
 Bad flow
 Underdeveloped living space
 Worst view
 Very little natural light
 An unwelcome entrance
 Undefined property lines
 No security system
 No backyard boundaries
 Noise
 Undeveloped structures
 Hidden square feet
 Bad kitchen layout
 No outdoor living area
 Cement yard
 No income potential
 Borderline neighborhood
 Tiny master closets
 No home office
 Underutilized storage spaces
 No privacy
 Wasted yard space
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

18. Your Dream Team
 General Contractor (licensed, insured and bonded)
 Subcontractors (Electrical, landscape, plumber, roofer,
painter etc.)
 Handyman (can work under GC license, otherwise you will
need to file with city for home owners permit yourself and get
work signed off)
 Design (sometimes get free help from home improvement
stores)
 Yourself (limit to demolition, cleanup, landscaping, spot
painting, wallpaper removal, change out switch faceplates,
replace door hardware; let other professionals do the rest)
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

19. Estimates & Contracts
Tips on estimates:
 Difficult initially, then gets easier
 Pay contractor based an hourly fee
for walk through if required
 Call subcontractors
 Interview three, pick one
 If they don’t show up to interview or
not responsive, find someone else
 Refer to Marshall & Swift guide
(www.marshallswift.com - $11 used
on Amazon)
Make sure contractor bids
include:
1. Line item bid of costs
2. Material and labor
breakdown
3. Materials detail
4. Any exclusions
5. Statement of insurance
and bonding
6. Debris removal
7. Completion time frame
8. Contractor payment terms
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

20. Budgeting & Scheduling
Budgeting Tips:
 Create more refined budgets as you
go.
 Initial at Big – 10% actual / 90%
guess,
 Offer accepted - More refined, get
contractor/subcontractor input during
escrow close
 Final – Take your offer accepted
budget and add an “Actual” column
to track variances and
overages/underages.
 Update budget at least twice a
week
Scheduling Tips:
 Plan ahead
 Order materials ahead
 Confirm your delivery
dates
 Keep contractors in
sequence (use
HomeFixers 50 steps to
rehabbing a house:
www.flipthebook.com)
 Only use in-stock materials
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

21. Design Tips: Key Principles
 Keep it simple (traditional styles to not alienate anyone)
 Stay consistent (same styles all rooms and
indoor/outdoor):
 Cabinetry: same style and color throughout the house
 Countertops: same styles in kitchen and bath
 Carpet
 Window treatments: same style in all bedrooms
 Hardware: Door knobs and door hinges
 Lighting
 Keep it neutral
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

22. Design Tips: Lighting
 Lots of natural light
 Avoid window treatments (cost, less light)
 Use dimmers (not just on/off)
 Use halogen bulbs
 Replace all switch plates, light switches and
electrical outlets
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

23. Design Tips: Painting
 Type:
 Flat: Walls, Celing, Stucco, Cement
 Semi Gloss: Kitchen Walls, Bath Walls, Woodwork, Cabinets, Wood siding,
wood trim
 Gloss: Doors
 Ceilings: Always a shade of white, makes room look bigger
 Interiors: Choose one base color of neutral tone, then choose one
shade darker and one shade lighter than base color. Most walls will be
painted lightest shade. Accent walls and adjoining rooms with one of
the two darker shades (for example kitchen in medium shade and living
room in darker shade).
 Exteriors: Neutral earth tone base color for large surfaces such as
walls, contrasting but complementary color for trim and accent moldings.
Rich, strong third color for very select accent items such as front door
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

24. Design Tips: Floor Plans
 Open floor plans
 Adjust non-load bearing walls
 Increase kitchen size if required
 Bigger master bath if possible
 Walk-in closets in master bedroom
Fix It
Find It
Flip It
New Fund
Source: “Find It, Fix It, Flip It!”

25. Part 3: How to Flip It

26. Staging
 Adding furnishings to make visitors associate with home:
 Gives buyers a visual blueprint of what life will be like
 Makes empty space feel warm and inviting
 Creates proportion in a big room through groupings
 Makes a tiny room feel larger through right furniture
 Showcases positive features and downplays negatives
 Tips:
 Keep classic and simple
 Make more expensive then everyday home furniture
 Bring your won, borrow from friends, second hand stores or hire a
professional stager
Fix It
Find It
Flip It
New Fund

27. Part 4: New Local Flipping Fund

28. Niyat
1. Help OC Mumineen start new businesses
2. Allow Mumineen with money in banks to earn
a return on the money while taking risk and
helping other Mumineen start businesses
Fix It
Find It
Flip It
New
Fund

29. Management Team
Management Team:
 Mulla S. Takhtawala:
 Engineering background
 Experience managing $5M+ Masjid construction project
 Mulla H. Kothari:
 Business background
 Real estate license/experience
Administrator:
 M. Khambaty:
 Business/financial analysis background
 Landscape architecture construction experience
Construction Advisor:
 Mulla T. Campwala:
 Licensed general contractor
 Multiple construction project experience
Fix It
Find It
Flip It
New
Fund

30. Timeline
Start Offer
Accepte
d/
Escrow
Started
Escrow
Closed
House
for Sale
Offer
Accepte
d/
Escrow
Started
Escrow
Closed
1-2 Months 1 Month 2-3 Months 1-2 Months 1 Month
6-9 Months
FIX ITFIND IT FLIP IT
Fix It
Find It
Flip It
New
Fund

31. Starting Housing Search
 Leverage realtors in Jamaat to help with housing
search:
 A. Hussain
 S. & R. Khambaty
 A. Sabir
 S. & S. Sikora
 Possibly set 2 week proposal period then evaluate
alternatives
 Focus on off MLS listings (“Worst house on best
block”)
 Target Neighborhood: Corona, Ontario, Chino,
Fix It
Find It
Flip It
New
Fund

32. Target Neighborhood
 Corona, Ontario, Chino,
Pomona
Target
Area
Fix It
Find It
Flip It
New
Fund

33. Sample #1: 1103 Francis ST #G
 Condominium located in Ontario, CA (1,051 sf, 2 bed &
2 bath, built in 1980) – Listed at $111,000
 Eventual Selling Price: $125 per s.f ($131,000)
 Other Costs:
Purchase & Sale Closing Costs: $11,000
Carrying Costs: $1,500
Fixit Costs (need to confirm): $10,000
 Potential Profit @ $10K: Max Offer of $98,000
Fix It
Find It
Flip It
New
Fund
Address Square Feet Selling Price $/sf
2321 Magnolia AV #14D
2125 Magnolia
Av2078 Mountain` Av
2220 Smoke Tree Ln
2033 Magnolia Av
2321 Magnolia Av #10d
2052 Mountain
Av1602 Mountain Av #F
1604 Mountain Av #9C
1046
1060
1200
1346
1060
1146
1200
1064
1064
$95,000
$102,000
$120,000
$150,000
$158,000
$160,000
$160,000
$163,000
$163,000
$91
$96
$100
$111
$149
$140
$133
$153
$153
Average 1132 $141,222 $125

34. Sample #2: 734 Saint Paul St.
 Single family residence located in Pomona, CA (1,289 sf, 3 bed & 1
bath, built in 1949) – Listed at $161,200
 Eventual Selling Price: $175 per s.f ($226,000)
 Other Costs:
Purchase & Sale Closing Costs: $13,700
Carrying Costs: $2,400
Fixit Costs (need to confirm): $20,000
 Potential Profit @ $20K: Max Offer of $170,000
 if @$160,000 offer, potential profit = $30,000
= 15% return in 6-9 months (30% annualized)
Fix It
Find It
Flip It
New
Fund
Address Square Feet Selling Price $/sf
1429 Farrell AV
1321 Alvarado
ST1002 Colmar ST
980 Colmar ST
779 Saint Paul ST
954 Karesh AV
1002 Colmar ST
1356 Brewster DR
1076 Karesh AV
1533
1223
1223
1225
1084
1254
1223
1366
1254
$246,000
$197,000
$202,000
$205,000
$216,000
$218,000
$275,000
$230,000
$239,000
$160
$161
$165
$167
$199
$174
$225
$168
$191
Average 1297 $227,300 $175

35. Terms & Conditions
 Use existing LLC
 50/50 Profit split between investors & management team
 Referred to as norm in reference books
 Expenses paid for management team but no salary
 All decision making with management team
 Investors are silent partners
 One flip at a time, then dissolve
 Minimum $20,000, no max. Profit payout based on % of
fund.
 Target Min. Fund: $200,000
 Monthly feedback meetings for investors on progress
Fix It
Find It
Flip It
New
Fund

36. Discussion Topics
 Using realtors (terms & conditions)
 Investment amounts
 Investor say-so
Fix It
Find It
Flip It
New
Fund