Get free access to our world class MLS search tools, save your favorite listings, create saved searches & much more!

Flip This House aka Empty Your Wallet

Posted by Julie Wright on Monday, June 2nd, 2014 at 12:03pm.

Flipping Homes in Las Vegas NV

Over the past month, the Las Vegas real estate market has been literally flooded with would-be flippers,  making up to 30 bids each per week.  They are offering anywhere between 70 to 80 cents on the dollar on homes listed for sale around the Valley, hoping to get just one offer accepted so they can get started on their road to real estate riches.

Where are all these Donald Trump wanna-bees coming from? What fueled this sudden rush of real estate entrepreneurialism?

Massive radio campaigns have fanned the flipping fire in people all across the country. They are advertising get-rich real estate seminars, and the promos go something like "Sign up now to learn the secrets of house flipping, seats are limited!" But guess what: the seminars are free and I have yet to meet anyone that couldn't get in.

The seminars promise a complete fool proof system for house flipping, and offer members access to investors that will fund 100% of the purchase price for any house they can put under contract that meets their secret sauce formula.  Each member will be "mentored" through the process, which involves hiring three or more real estate agents and shot gunning offers right and left until one gets accepted within the proscribed criteria.

And the cost of mentorship? A mere $40k to start.

But the only ones really making any money are the promoters. Think about this: they are running ads and events in almost every major city across the country simultaneously. At $40k a pop, just 100 sign-ups will bring in $4M. They've managed to accomplish that in Las Vegas alone during the past month. Their total take across the country must be astronomical. (Did I mention that in addition to the mentoring fee, these promoters also get a cut of any future profits?)

Even normally intelligent people are getting caught up in the hype and allure of flipping. I had an email from a childhood friend of mine a few weeks ago. He is a controller at a major university, and he wanted to get my opinion about whether he ought to sign up and go for it!

Of course I told him to run far, far away, but it shook me when I realized the caliber of people these promoters were able to hustle.

Then, just a few days later, we had a new client come into the office that wanted to start making offers. He explained the program in great detail, and was totally sincere and enthusiastic and could not WAIT to get going. He was totally willing to go running around the city to look at all the houses we could push at him and do his homework, even if it took 12 hours each day - he was that committed. He knew there would be lots of rejections, he was prepared for that. But he was not prepared to be totally shot down on each and every offer because he was following the mentor's guidelines.

Over the next few weeks we were able to gently show this genuinely nice man that he would have been far better off to have kept his $40k in his pocket. (In the meantime, the promoters were after him to attend yet another seminar at the mere cost of $10k. When he said no, they even offered to pay for his airfare.)

This is not to say that there are not successful entrepreneurs that make a nice living in Las Vegas by flipping houses. There absolutely are! But like most successful businesses, it is not a quick buck. These guys are professionals that put their time in and do their homework and grind it out over the long run. On average they make about a 7% return, not 20% or 30%, on a very labor intensive, cash heavy business. Most people really don't want to work that hard and/or don't have the funds to put into it.

The bottom line is - buying homes for sale in Las Vegas can be great! But generally speaking, it is a long term investment that pays for itself along the way, and sometime in the future (appreciation) can provide generous returns.

Mastura Roberts
(702) 919-5400
offers@greatlasvegashomes.com

Team Leader, The Tonnesen Team
Berkshire Hathaway HomeServices, Nevada
3185 St Rose Pkwy #100 Henderson, NV 89052

With over 30 years of experience helping families call Las Vegas "home!"



Related Blog Posts

Greater Las Vegas Real Estate Market Overview

August 2017 Single Family Residential (SFR) closed sales were up 4.2% from July and 5.1% better than August 2016. Year to date 2017 closed sales are now up 10% over 2016.   The median closed sales price of a SFR remained flat at $260,000 while the average closed sales price of an SFR dipped t...

Get 3.5% Paid Toward Your Closing Costs!

If you have been thinking about buying a home in Las Vegas in the next five weeks, Fannie Mae might pay 3.5% of your closing costs! This spring, in an effort to move some of the foreclosure inventory in its portfolio quickly, Fannie Mae is offering a special closing cost incentive for owner/occupants who go to contract...

Las Vegas Lender Thinks Outside the Box!

The Tonnesen Team preferred lender, All Western Mortgage, has secured a relationship with one of the top credit unions in Las Vegas, and is now able to offer three very exciting and new loan programs that NO OTHER LENDERS HAVE. Check out the guidelines for their fresh start loans (only one day out of short sale or fore...

Net worth of homeowners 44 times more than renters

   Monday August 20th, 2018  First Time Home Buyers, For Buyers, Move-Up Buyers, Rent vs. Buy Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest...

Las Vegas Housing Inventory Stabilizes in July

It seems like the downward spiral of available housing inventory for the Las Vegas real estate market has finally stabilized, and it even increased slightly during the month of July. The number of actively listed single family homes went from 3785 at the end of June to 3953 at the end of July. (These figures do not...

Leave a Comment

Have a Question?

Contact Us

Follow Us