447: How to Flip a House in 7 Days

SHOW NOTES FOR EPISODE 447: HOW TO FLIP A HOUSE IN 7 DAYS

Building a real estate business that generates enough money to replace your W2 income is not an easy task – unless you’re an over-achieving house flipper named Tyler Jensen.  In today’s podcast, entrepreneur, philanthropist and flipper extraordinaire Tyler Jensen shares how he went from milking cows to corporate executive to full-time power house flipper who has the distinction of being the first fix ‘n flipper to flip a house in 7 days.

What You Will Learn

• Why flipping is one of the easiest types of real estate investing businesses to start
• How you can flip a house in 7 days
• Finding the right market to flip in
• What is the best way to move from a W2 job into a full-time real estate business?
• How to scale your flipping business from 1 or 2 house flips a year to 40 flips a year
• What was the one thing Tyler did that transformed his business into a high-volume, high income real estate business
• How to invest in flipping houses without having to do any work

About Our Guest

Tyler Jensen

Tyler Jensen is an avid Real Estate Investor, International House Flipper, Philanthropist, Coach, Husband, and Father to three amazing boys. He has been flipping houses for more than 10 years.  He started flipping houses in college and has never looked back.  He loves real estate and gets satisfaction from taking an old dumpy crack house and turning it to something truly amazing that a family will be able to create memories in as their new home.  Tyler has built a great business and has one of the best flipping companies in the country.  His systems and processes for flipping houses has been raising the bar for other investors.  He loves coaching and helping others pursue their dreams and passions in real estate.  Tyler has also coordinated several charity projects both locally and internationally.  From donating a rehab to a local single mom for Christmas to building houses in the Dominican Republic.  He is truly a “Go-Giver” and has a love for using his skill to bless the lives of others.  He loves giving back and loves pushing the envelope on rehabbing houses.

More About Tyler

• Grew up in a little town north of Salt Lake City, Utah
• His family worked on a dairy farm
• He had to get up early every morning to milk cows and milk again when he got back from school in the afternoon
• Learned the value of hard work
• After high school, did mission work in Australia
• Came back and started college, majoring in Accounting and English
• His plan was to graduate and eventually get into real estate
• In 2008, Tyler and his father launched a real estate company called Pay it Forward Enterprises
• They would do short sales and foreclosures and help people get out of bad mortgages
• Tyler’s dad’s family went through a foreclosure when he was a kid and they wanted to help people facing the same situation
• They would flip one or two houses a year
• Tyler would do all the work – paint, tile, etc. – and learned most of his construction skills from YouTube and by paying pros to teach him
• He was also working a full-time job and going to school full-time
• He only worked on the flips in his spare time

The Corporate Life

• He graduated college and went the corporate route
• Still flipping houses on the side to pay off college expenses
• Worked up to be a COO of a company, Director of Operations
• The corporate job was 80 hours a week
• He felt like they took his soul
• His passion was still for real estate but he worked the corporate job to make more money
• His dream was to have his own real estate business one day and to spend more time with his wife and family

His First Flips

• On his first flip, he partnered with a guy and said you fund the deal and we’ll do all the work
• His first flip lost $37,000 – more money than he could make in a year
• He made every mistake in the book
• Bought it wrong
• Over-rehabbed it
• Thought that their After Repair Value would be a lot higher than it was
• They told their partner that it was their fault and that they would pay him back
• On the second flip, they made $39,000 – gave it all to their partner
• The third one, they made $19,000

His Real Estate Business Evolves

• While still working full time in the corporate world, he went from flips to short sales
• They would negotiate with the bank and do a “A to B transaction” and sell it retail to someone else
• They were more “flipping contracts” than flipping houses
• In 2010-2011, the short sales and foreclosures started to go away
• They started getting Notices of Defaults as the market started to recover
• Then, they went back to flipping
• In the beginning, he was doing one or two houses a year (because he was doing all the work while working a full-time corporate job)
• Typical house they would flip was 1,800 sq ft, 3 bed 2 bath
• The houses are located in northern Utah in three main counties
• 80% of their houses are in Ogden, Utah, where there are a lot of first-time home buyers
• The median housing price in Utah is $330,000
• They are selling their houses in the $250,000 range
• It was getting to be too much for him so he started bringing in some sub-contractors

Scaling His Flipping Business

• Tyler took on more of a General Contractor role
• Then, he eventually hired a GC and Tyler just oversaw him
• The GC didn’t work out so he returned to the GC role
• He kept hiring more subs and would oversee them
• Then, he hired a project manager who managed the subs and Tyler would manage the project manager
• This then helped him to start scaling his business and flip more houses
• They were up to 3 or 4 flips a year
• Tyler was now making more in his real estate business then he was in his corporate job

Going Full-Time Real Estate

• He told his wife he wanted to do real estate full-time and she said “No”
• She said, “You’ve got a good paycheck, benefits, retirement and security – Why would you ever want to leave that?”
• He said, “Look, we have enough money to cover everything for six months.  I’ll get the health insurance, retirement account.  I’ll take a paycheck every two weeks.  The only difference will be my office will be in the basement.”
• She said, “Alright, you have six months.  If it doesn’t work out, you’ve got a good education and good experience.  You can always get a job if things don’t work out.”
• That was three years ago
• He hasn’t turned back since
• They are currently doing 40 houses a year
• His company now consists of three full-time construction crews, a property manager, 2 designers, disposition guy who sells the properties, and 2 acquisition guys buying properties

Flipping Houses in 7 Days

• Last year, Tyler and his team said, “What would it look like, if we took away all the variables, and flipped a house in 7 days?”
• They found a $40,000 rehab
• His project manager said it would not be possible
• Took at the variables – Parkinson’s law: What ever time you allow for a project, it will take that long!
• They planned every aspect of the flip out to the “T”
• They rented a U-Haul truck
• They, then, started stacking the supplies they would need, with the first items closest to the door
• You’d open up the truck on the first day and everything was there that you needed for day one
• Everything for day 7 was at the back of the truck
• They even factored in how much it would be to cater in lunch instead of letting the guys go out to lunch – they calculated out that they would lose 1.5 hours if the guys took their own lunches
• They also killed Home Depot runs

Their First 7-Day Flip

• $40,000 rehab
• Changed electrical panel
• Put in all new plumbing
• Updated HVAC system
• Did it in 6 days
• On the 7th day, they did touch-up paint and small things
• It was a game changer for his business – they had broken the 4 minute mile
• It had never been done before

Then They Did More and More

• They then knew they could do it so they did it again and again
• The second one didn’t go as well as the first one because they had gotten cocky and didn’t plan it as well and they changed things in the middle of the project
• But they learned a lot in the process

Four Rehabs in 7 Days and the Making of a Documentary!

• Then, they did four rehabs at the same time, in 7 days – two duplexes right next to each other.  They filmed it as a 10-episode documentary that is now on YouTube
• They even worked in  advance with the city building inspectors so that it would work with all the approval process as well

Biggest Mistake

• His biggest mistake was with his very first flip
• He learned a lot from that experience
• It was also his most painful experience with his real estate business
• He realized that he really didn’t understand anything and jumped into it blindly
• Losing $37,000 was a big loss for a college kid
• What he learned:
  • He should have had more experience before jumping into his first flip
  • He handled the situation with his investor with integrity.  He paid him back in full from the next flip he did
  • He didn’t give up after that experience.  He persevered

Biggest Success

• Surrounding himself with good people
  • With his own employees – hiring quality people who understand his vision
  • With mentors – 7 Figure Flipping group
    • They were the ones who really changed his business
    • They told him he could “break the 4 minute mile” by doing a 7-day flip
    • They helped him go from 12 flips a year to over 40
  • It’s hard to fly with eagles if you’re surrounded by turkeys
  • He tries to surround himself with people who are better than him

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

• He loves the 50 plus age group
• A lot of “old dawgs” are probably not excited about starting a new business and taking that risk
• He recommends finding someone who is young, hungry and passionate to launch a real estate business and invest in them
  • Use your self-directed IRA
  • The investment is backed/secured by a real tangible asset (real estate)
  • They will pay you a higher interest rate than most other types of investments out there for your support
  • Generate cash flow by investing in people who can make a real estate business work
  • It’s totally passive
• You could also get into rental properties but that wouldn’t be as passive

Current Business

• Tyler will always do house flips – he loves it!
• His long-term goal, however, is to create passive income
• Right now, everything he is doing in real estate is very active and will likely continue for the next 5 years
• Eventually, however, he hopes to start investing his cash reserves in syndications for multifamily or commercial properties

Rap-It-Up

• Favorite real estate book: Level Jumping by Mike Simmons
• Favorite business book: How to Win Friends and Influence People by Dale Carnegie
• Most valuable web site for success (other than your own): 7 Figure Flipping
• Favorite app: Driving for Dollars
• Favorite quote: “If you think you can or think you can’t you’re right.” – Henry Ford
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Spend it on buying lunches for  people who could help him build his business.  Build his network.

How to Reach Tyler

• Website: Utah House Flip

Links

• Flip Hacking Live 3-Day event – https://fliphackinglive2020.eventbrite.com/?aff=tylerjensen
• Tyler’s 4 Rehabs in 7 Days YouTube Series – https://www.youtube.com/watch?v=Mh61tkh5P78&list=PLyi_BxeONiBx0pZuXkAoNBu6Ex3NbzbPD
• 7 Figure Flipping Mastermind – 7figureflipping.com

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com