Lessons Learned: My Experience with The 'Flip System'

[Matthew Estrada]

Hello everyone,

I recently read a post and wanted to share my experience with The “Flip System”, as I believe transparency is crucial when considering investments like this.

I come from a blue-collar background as a first responder in Los Angeles, and I was drawn to Flip System due to the promise of having deals vetted and presented to me, as well as receiving education on how to fix and flip, implement the BRRRR strategy, and sell turnkey properties. This approach seemed ideal given my demanding schedule. I paid a substantial $15,000 initiation fee to join this community and was assigned to invest in a Midwest City.

Initially, I was optimistic as I was provided with a General Contractor and Real Estate Agent for my team. However, things quickly took a turn for the worse. The real estate agent I was assigned passed me off to someone else without explanation, and the general contractor stopped communicating with me once I had my first deal under contract. I had to rely on my new real estate agent to find another contractor, adding unnecessary stress to the process.

The deal I was presented with had an ARV of $120,000, but after the rehab, the appraisal came in at only $92,000, leaving me short by $28,000. Furthermore, I later discovered that the property was located in a C- neighborhood, which was not disclosed upfront. Currently, I'm struggling with an eviction on this property and have not made any profit. To add insult to injury, I was charged an additional $1,000 for Flip System providing me this problematic deal.

My disappointment continued with the lack of educational value provided by Flip System. Despite paying a substantial fee, I found that beyond basic instructional videos and repetitive weekly calls, there was little substance to aid my learning. Learning by doing and teaching is my philosophy, and unfortunately, this system did not facilitate that process.

I truly wanted this endeavor to succeed and even expressed my gratitude by sending Fire Station shirts to the Flip System crew. However, my experience has been disappointing, and I deeply regret investing $15,000 that I could now desperately use.

Based on my firsthand experience, I would caution against expecting Flip System to deliver on its promises of support, education, and profitable deals. If you have any further questions or would like more details about my experience, please feel free to reach out.

Thank you for reading, and I hope my story helps others make informed decisions.

Best regards,

Matt

[James Wise]

Quote from @Matthew Estrada:

Hello everyone,

I recently read a post and wanted to share my experience with The “Flip System”, as I believe transparency is crucial when considering investments like this.

I come from a blue-collar background as a first responder in Los Angeles, and I was drawn to Flip System due to the promise of having deals vetted and presented to me, as well as receiving education on how to fix and flip, implement the BRRRR strategy, and sell turnkey properties. This approach seemed ideal given my demanding schedule. I paid a substantial $15,000 initiation fee to join this community and was assigned to invest in a Midwest City.

Initially, I was optimistic as I was provided with a General Contractor and Real Estate Agent for my team. However, things quickly took a turn for the worse. The real estate agent I was assigned passed me off to someone else without explanation, and the general contractor stopped communicating with me once I had my first deal under contract. I had to rely on my new real estate agent to find another contractor, adding unnecessary stress to the process.

The deal I was presented with had an ARV of $120,000, but after the rehab, the appraisal came in at only $92,000, leaving me short by $28,000. Furthermore, I later discovered that the property was located in a C- neighborhood, which was not disclosed upfront. Currently, I'm struggling with an eviction on this property and have not made any profit. To add insult to injury, I was charged an additional $1,000 for Flip System providing me this problematic deal.

My disappointment continued with the lack of educational value provided by Flip System. Despite paying a substantial fee, I found that beyond basic instructional videos and repetitive weekly calls, there was little substance to aid my learning. Learning by doing and teaching is my philosophy, and unfortunately, this system did not facilitate that process.

I truly wanted this endeavor to succeed and even expressed my gratitude by sending Fire Station shirts to the Flip System crew. However, my experience has been disappointing, and I deeply regret investing $15,000 that I could now desperately use.

Based on my firsthand experience, I would caution against expecting Flip System to deliver on its promises of support, education, and profitable deals. If you have any further questions or would like more details about my experience, please feel free to reach out.

Thank you for reading, and I hope my story helps others make informed decisions.

Best regards,

Matt

[Chris Clothier]

@Matthew Estrada,

There are a lot of investors on here from the Midwest.  If you need assistance with eyes on the ground, resources or companies to work with, my suggestion would be to get on here and be transparent just like you were with this post.  Let people know where you need help and investors in those cities, in most cases There are a lot of good people here who will try and help if they can and will do so without taking advantage of you.  Managing rehabs, rentals and really any RE project form afar is difficult.  Don't kick yourself.  See if you can get a positive result on this deal as quickly as possible and then figure out the mistakes and next steps.  

Appreciate your transparency and willingness to share.  Hopefully you are able to find a solution to get this deal finished with a net positive result.

[Jay Hinrichs]

remote rehab is the highest risk en devour basically in all of RE. ESPECIALLY at the price points your talking about.. I dont have much specific advice to help you with this one as it appears you may have just blindly trusted the system you bought into and now find yourself in a pickle.

with these types of assets it rarely gets better so careful throwing good money after bad.

U may need to just liquidate and and regroup.

I dont suppose the company you paid for all this education and system is stepping up for you hear in a financial way ?? or are they. ??

[Nathan M kiefer]

Quote from @Matthew Estrada:

Hello everyone,

I recently read a post and wanted to share my experience with The “Flip System”, as I believe transparency is crucial when considering investments like this.

I come from a blue-collar background as a first responder in Los Angeles, and I was drawn to Flip System due to the promise of having deals vetted and presented to me, as well as receiving education on how to fix and flip, implement the BRRRR strategy, and sell turnkey properties. This approach seemed ideal given my demanding schedule. I paid a substantial $15,000 initiation fee to join this community and was assigned to invest in a Midwest City.

Initially, I was optimistic as I was provided with a General Contractor and Real Estate Agent for my team. However, things quickly took a turn for the worse. The real estate agent I was assigned passed me off to someone else without explanation, and the general contractor stopped communicating with me once I had my first deal under contract. I had to rely on my new real estate agent to find another contractor, adding unnecessary stress to the process.

The deal I was presented with had an ARV of $120,000, but after the rehab, the appraisal came in at only $92,000, leaving me short by $28,000. Furthermore, I later discovered that the property was located in a C- neighborhood, which was not disclosed upfront. Currently, I'm struggling with an eviction on this property and have not made any profit. To add insult to injury, I was charged an additional $1,000 for Flip System providing me this problematic deal.

My disappointment continued with the lack of educational value provided by Flip System. Despite paying a substantial fee, I found that beyond basic instructional videos and repetitive weekly calls, there was little substance to aid my learning. Learning by doing and teaching is my philosophy, and unfortunately, this system did not facilitate that process.

I truly wanted this endeavor to succeed and even expressed my gratitude by sending Fire Station shirts to the Flip System crew. However, my experience has been disappointing, and I deeply regret investing $15,000 that I could now desperately use.

Based on my firsthand experience, I would caution against expecting Flip System to deliver on its promises of support, education, and profitable deals. If you have any further questions or would like more details about my experience, please feel free to reach out.

Thank you for reading, and I hope my story helps others make informed decisions.

Best regards,

Matt

 I understand why these highway robbery companies exist but there is no way I would ever pay someone $15k to teach me how to lose money. I understand that isn't what you thought initially but 15k is insane to get what you got and ended up with.

There is way to much social med. crap that "get rich quick" is a pure and total smoke screen regarding real estate. In the end, in this REI business you have to have a gut instinct that prevents you from doing these kinds of things, if you don't, you are going to have a lot of loss in REI.

ARV might as well be a unicorn in this situation as clearly was not reality.

[Eric James]

The bright side is that you have learned a valuable lesson on real estate investing. One that you'll never forget. That kind of real learning only happens when you put your own money at risk. People doing "no money down" don't learn that way, because they aren't risking their own money.

[Eric Martel]

Here is an email you sent us. We've also been trying to reach out for 1-1 coaching and you haven't responded to us for months. We're here to help but you have to help yourself. Be accountable.

[James Wise]

Quote from @Eric Martel:

Here is an email you sent us. We've also been trying to reach out for 1-1 coaching and you haven't responded to us for months. We're here to help but you have to help yourself. Be accountable.

 Ohhhhhh snap.......The plot thickens.

[Matthew Estrada]

Quote from @Eric Martel:

Here is an email you sent us. We've also been trying to reach out for 1-1 coaching and you haven't responded to us for months. We're here to help but you have to help yourself. Be accountable.

Dear Eric,

I wanted to talk about a few things from your message.

First, I want to mention the coaching you brought up. I haven't received any direct emails or messages about 1-on-1 coaching from your team. If you have any records of these communications, could you please share them with me?

About my last email, I want to explain that I wrote it not just to say thanks but also to talk about some practical issues. I was finding it hard to keep paying almost $200 each month for the PTS system when I wasn't really using it. This became even tougher given the challenges I faced soon after, like discovering the low ARV of properties and dealing with a neighborhood rated as C- along with an eviction situation.

As I mentioned earlier, I really valued the experiences I gained, despite the setbacks and failures. That's why I sent shirts to the Flip System crew as a gesture of appreciation. You can even see Antione wearing the hoodie I gave him in some of his videos.

When I was looking into Flip System before investing, I struggled to find reviews and stories like mine. If I had known about more diverse experiences, it might have affected my decision. This is the only reason I created this post to share my story and experience. 

I also understand the importance of protecting your business standards. Even though I faced failures and challenges, I'm grateful for the learning opportunities they provided, because they have forced me to learn how to analyze deals the right way instead of let them be provided to me.

Lastly, I want to highlight my background as a first responder with almost two decades of service in one of the nation's busiest departments. I've experienced a lot of trauma and sadly, I've lost many colleagues. These experiences have taught me the importance of accountability.

Take care,

Matt

[Becca F.]

@Matthew Estrada

I know this post is almost a month old but thanks for sharing your experience. I got on a call FlipSystem and I found the $15,000 fee to be very high. I made offers in the Midwest (Indianapolis) to attempt to BRRRR and 2 flips with a Hard Money Loan, not using any guru or coaching program but with on market properties. After talking to a construction management company, I found the ARVs to be inflated. I also kept track of the properties that I made offers but didn't go through with but another investor bought. That confirms what I saw with the ARVs. I think flipping OOS is risky to try to make $20,000 or $30,000. If the renovation goes over or it takes a long time to sell the property, all your proceeds are wiped out. Not to mention if you profit $10,000 or $20,000, you have to pay capital gains tax on it.

I wound up not doing any BRRRRs or flips OOS. I bought move in ready (which has had its share of repair issues). I did a local renovation where I was onsite at least once a week and I went over budget by more than $50,000 but because California properties appreciate or at least hold their value.

If you can find a way to invest in the LA area or within driving distance you have a lot more control than buying 2000 miles away and doing a renovation from far away. Not sure if you have networked with local REIA groups but having discussions with LA investors are buying locally or OOS would be helpful - this is what I did in the Bay Area. Good luck.

[Andrew Syrios]

Quote from @Jay Hinrichs:

remote rehab is the highest risk en devour basically in all of RE. ESPECIALLY at the price points your talking about.. I dont have much specific advice to help you with this one as it appears you may have just blindly trusted the system you bought into and now find yourself in a pickle.

with these types of assets it rarely gets better so careful throwing good money after bad.

U may need to just liquidate and and regroup.

I dont suppose the company you paid for all this education and system is stepping up for you hear in a financial way ?? or are they. ??

Ain't that the truth. There are some trustworthy turnkey companies but plenty of shysters out there too. And I would never trust one to do a flip. There's usually little or no equity in turnkey deals, certainly not enough to profit from a flip. 

[Najma Osman]

HI @Matthew Estrada, thanks for sharing. I agree with the other responses. Do not kick yourself too much, it was a learning experience. While it was a costly one, hope it does not discourage you from investing in real estate. There are great people out there that are willing to help and would love to watch you succeed. While you continue to learn, let me know if you ever have any questions about any real estate topics, I'm always happy to chat! 

[Travis Biziorek]

Quote from @Becca F.:

@Matthew Estrada

I know this post is almost a month old but thanks for sharing your experience. I got on a call FlipSystem and I found the $15,000 fee to be very high. I made offers in the Midwest (Indianapolis) to attempt to BRRRR and 2 flips with a Hard Money Loan, not using any guru or coaching program but with on market properties. After talking to a construction management company, I found the ARVs to be inflated. I also kept track of the properties that I made offers but didn't go through with but another investor bought. That confirms what I saw with the ARVs. I think flipping OOS is risky to try to make $20,000 or $30,000. If the renovation goes over or it takes a long time to sell the property, all your proceeds are wiped out. Not to mention if you profit $10,000 or $20,000, you have to pay capital gains tax on it.

I wound up not doing any BRRRRs or flips OOS. I bought move in ready (which has had its share of repair issues). I did a local renovation where I was onsite at least once a week and I went over budget by more than $50,000 but because California properties appreciate or at least hold their value.

If you can find a way to invest in the LA area or within driving distance you have a lot more control than buying 2000 miles away and doing a renovation from far away. Not sure if you have networked with local REIA groups but having discussions with LA investors are buying locally or OOS would be helpful - this is what I did in the Bay Area. Good luck.

Great summary, Becca. Most companies inflate the ARV. They also act like the ARV is the same as what a property would fetch on the open market.

This simply isn't the case in markets like Detroit. I'm always very honest with folks about ARV's. If anything, we downplay them. Many of the appraisals come in above our projections.

BUT... while a high appraisal is nice, that doesn't mean it's a guaranteed selling price. I often see $130k appraisals but I'm certain the property would maybe fetch $110k on a sale.

It's an important distinction. If you're simply looking to pull your capital out and cash flow with a LTR, the high ARV is great. And I'd happily take it, knowing it's above market price, in exchange for my cash back.

But if you're trying to pull off a fix-and-flip you need to be realistic. Margins are tight and screwing up the math or having unrealistic expectations will end you up in trouble pretty quick!

[Engelo Rumora]

Quote from @James Wise:

Quote from @Eric Martel:

Here is an email you sent us. We've also been trying to reach out for 1-1 coaching and you haven't responded to us for months. We're here to help but you have to help yourself. Be accountable.

 Ohhhhhh snap.......The plot thickens.

There are always 2 sides to the story so it's nice to see when the service or product provider can show proof, etc...

As you have seen with me first hand over the last few weeks.

I've always believe in learning from mistakes and only blaming myself when $#@% hit's the fan.

There is enough free content available online for everyone to study.

You will only truly learn when you start doing.

Thanks

[Michael Smythe]

@Matthew Estrada what city?

[Peter ONeill]

My experience seconds this.

[Becca F.]

Quote from @Michael Smythe:

@Matthew Estrada what city?

 I also got on a call with Martel Turnkey, which is different from FlipSystem but started by the same group of people. The listings they sent me were in Detroit area, Cleveland and  a few in St. Louis area. They were renovated properties, many already had tenants in place. I considered this, as well as buying from a turnkey company in Memphis but wound up buying in Indianapolis since I was familiar with Indy (lived there for a while then moved back to CA). 

You can see the listings for sale on Martel Turnkey on their site right now. I don't think it's a bad business model, a turnkey company marketing to OOS investors, but since I didn't do business with them, I don't know much about their homes. I'm not sure if it would be the same cities as FlipSystem. 

[Regina Blake]

Hi, while this is unfortunate that this happened to you. I am a strong believer that this will work out for you after you do your homework. Please keep your head up. I just want to inform you that I am an Ohio Realtor. If you have any questions, please feel free to contact me. Thanks!

[Giannina Leyton]

I am about to sue Flip Systems for my money. and Mino Lending as well. 

They work together.

So far lost a property and lost money as well. No help from what supposed to be "the school" they have ignored me and I had to hire a lawyer. Be careful. Definetely I won't recommed. 

[Giannina Leyton]

You pay $15,000 to be ignored. Do not do it. I will sue them. 

[Shawn Harper]

Quote from @Giannina Leyton:

I am about to sue Flip Systems for my money. and Mino Lending as well. 

They work together.

So far lost a property and lost money as well. No help from what supposed to be "the school" they have ignored me and I had to hire a lawyer. Be careful. Definetely I won't recommed. 

[Giannina Leyton]

After speaking with my lawyer we realized that FlipSystem is not at fault. The issue I faced was with the lender not with FlipSystem.

[Jay Hinrichs]

Quote from @Giannina Leyton:

After speaking with my lawyer we realized that FlipSystem is not at fault. The issue I faced was with the lender not with FlipSystem.

sounds like someone got a nasty gram from FLIP system lawyers :)

[Giannina Leyton]

not really :)

[Engelo Rumora]

Quote from @Jay Hinrichs:

Quote from @Giannina Leyton:

After speaking with my lawyer we realized that FlipSystem is not at fault. The issue I faced was with the lender not with FlipSystem.

sounds like someone got a nasty gram from FLIP system lawyers :)

Can I do that mate?

Someone questions my integrity on Bigger Pockets and I get legals to "pepper" them with letters? haha

Jokes 

[Jay Hinrichs]

Quote from @Engelo Rumora:

Quote from @Jay Hinrichs:

Quote from @Giannina Leyton:

After speaking with my lawyer we realized that FlipSystem is not at fault. The issue I faced was with the lender not with FlipSystem.

sounds like someone got a nasty gram from FLIP system lawyers :)

Can I do that mate?

Someone questions my integrity on Bigger Pockets and I get legals to "pepper" them with letters? haha

Jokes 

yup   its obvious  feel sorry for the  orginal poster or anyone who drops 15k or more on this stuff.