How to Flip in Cleveland

[Erin Dorsey Robinson]

I’ve seen a lot of interest from people both in and outside Cleveland who want to flip here. My husband @Dwight Robinson and I are realtors and investors here so we have seen a lot of great flips…and a lot of horrible better-off-throwing-your-money-in-a-hole-in-the-ground-and-burning-it flips. I thought I’d share a couple pointers so those seeking to get in on the CLE flipping opportunity don’t find themselves in the latter camp. It’s a very sad camp.

Here are 3 basic dos and don’ts and things you should know about flipping in Cleveland. There is more, but these are some very common pitfalls that are difficult to fix on the back end. As always, there is more than one opinion and more than one right way to skin this cat, so take from this what you will. But this is how we advise our clients.

1. Give the customers what they want!

Flippers have customers. They are known colloquially as buyers. 😊 Think of the average buyer in the market as your Avatar. Know him, love him and put him first in everything you do. He will reward you by buying your house quickly at 90+% of asking price in the current market. In Cleveland, that person according to the national association of Realtors is:

-Part of a FAMILY WITH CHILDREN! (75%)

-39 years old

-Earns $71k/ year

What does your Avatar want? Decent schools, stable neighborhoods, 3-4 bedrooms… what else? Think about it and do what makes sense for your Avatar.

2. Work with a Realtor! who understands investment and how to work with investors

Let me ask you this- If you were feeling sick and needed medicine and it was legal to skip the doctor and go straight to the pharmacy shelves and pick your poison yourself, would you do it to save $40 on your co-pay? The answer is not if you want to live! No more should you run off half-cocked buying FSBOs off of Zillow sight unseen in neighborhoods you know nothing about. People think Cleveland is a monolith. It’s a city of very distinct neighborhoods. Some will make you money. Others will suck you dry.

People who are busy trying to save every dime by avoiding realtors end up spending that commission money 3-fold on carrying costs when they get stuck with stinkers in areas where there are 50 houses listed per month and only 3 selling. Face. Palm. Partner with a realtor who knows how to work with investors and can provide you tools to find good deals to make more money faster, help you build a reputable team and be your eyes and ears on the ground. Isn’t that a service worth paying for? Which brings me to point #3…

3. Location! Location! Location!

Buy a house in a neighborhood where home sales far exceed listings in the price range you want. Those are the places where your Avatar is buying! Why would you want to cast your line anywhere but where the fish are biting?

I created a report that looks back on the last quarter and shows by school district or area (in case of the city of Cleveland proper) how many homes were listed and how many were sold in each price range. Why? Velocity! I want my clients buying flips that once repaired are going to sell FAST so they can get that money into the next deal. Here are 2 snapshots of that report so you can see how it works. Your realtor should be creating and arming you with this kind of data. That's what makes them worth paying.

Looking at these examples, would you rather flip in Bay Village in the $200-250 range (green highlight) or Cleveland east of the River in the $50-100k range? NOTE: these are neither the best or worst areas to flip in for our Avatar. Nor is this the complete set of analysis that goes into selecting a good area. This is only an example. But you get the point! Where do you think you're going to get your money back faster?

CLE Flip Velocity Report-- Erin Dorsey Robinson

So, this has gotten a little lengthy and there is so much more to say. But, I'm going to stop here and hope that this has been helpful. If there's interest, maybe I can turn it into a blog or something let me know.

Happy flipping!