Going to courses and seminars and reading books by so-called gurus, Catherine Bell discovered that all these gurus have a few things that are very similar. While there’s never really a cardboard cutout of them, they all have this similar three-step sales process which starts with a weekend or day training, upgrading to boot camps, and then a full-blown mentoring program. Catherine is VP of Operations for Flipping Females, a group of successful investors that mentor and train people on how to become successful real estate investors in the world of fixing and flipping properties. The company was founded to prevent people from getting ripped off by these enterprising gurus who’ve actually never done a fix and flip ever in their life and yet they were claiming to teach it. Catherine says if you’re going to learn fix and flipping, you can’t learn it through a book, a webinar, videos, or a phone conference. You actually need to have your boots on the ground learning exactly how to manage everything that comes up in a fix and flip.
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Catherine Bell, VP Flipping Females, Mentoring And Training Entrepreneurs To Fix And Flip Properties
We’re incredibly fortunate we’re operating remote in a conference in Tampa, Florida. I have Catherine Bell. She’s from Scottsdale, Arizona, and she’s the VP of operations for Flipping Females.
Yes, thank you.
With the name Flipping Females, folks are going to go, “What in the world is Flipping Females?”
What the Flipping Females is, is we are a group of successful investors. Most of us are all women, and we mentor and train people how to become successful real estate investors in the world of fixing and flipping properties.
There’s a lot of attention and a lot of media in the flipping world and TV. How long have you been up to this?
We’ve been doing this for almost five years.
You’re across the Phoenix area?
We are, and we’re in Las Vegas and moving into Texas as well.
How in the world did you get started?
The company Flipping Females, how it got started was all of us being successful investors. As an investor, we’re always learning, growing, expanding, figuring out how to be a better investor, and how to have our ROI be better. We’re always going to courses, seminars, and reading books, whatever it is. Ultimately, what happened was there were the gurus that come to town all the time and teach these courses. We, as investors, would always go because if we could learn one new thing that has us be a better investor, it was completely worth our time and money. We kept going. Inside of that, what we discovered was all these gurus have a few things that are very similar. One, the guru was just a cardboard cutout of them. Two, that they all have this similar three-step sales process. The first one is you go to a weekend or day training, it’s free. Then they upgrade you to the boot camp, which is usually a little bit longer. Then the whole time they’re at that, they are having you increase your credit card limits for the purpose of what they say is real estate investing, but at the end of the day, they just want you to pay $60,000, $70,000, the latest I heard was a $120,000 for their mentoring program. That wasn’t okay with us.
The founder of the company, we’ve done hundreds of these projects and inside of conversations with several of the people that were running the event, it was pretty easy to determine that they’d never done a fix and flip ever in their life and yet they were claiming to teach it. There was a little old lady, she was about 70 years old and she got up and started walking to the back of the room with her credit card to put down $60,000. He stood up and said, “Hold on. What are you going to teach her that she’s going to earn the $60,000 back in her lifetime? This is probably her life savings.” He got kicked out. “Sir, you need to leave.” He was so mad that these people could come into town and rip little old ladies off that he said, “Never again is this going to happen.” That’s essentially how our company was born. He said, “If you’ve got $60,000, you need to be putting that into property. That’s what you need to be doing, not giving it to somebody else for some other course. Because if you’re going to learn fixing and flipping, the reality is, as an investor, you can’t learn it through a book or a webinar or videos or a phone conference. You need to be boots on the ground learning exactly how to manage everything that comes up in a fix and flip.”
We’ve done hundreds of these. I’ve done 159 and I’ve got 40 going on. There’s no two projects that ever look the same. As an investor, I’m still learning on every single project, and that’s how you learn. Here’s the challenge. How do we overcome and create the solution? As investors, we all came together and we all have the same philosophy that we have a desire to come up along people and teach them, but more importantly, to train them because training is very different than just education. Training is where you’re actually doing it. All of us have that commitment and that desire to make a difference and to have people be successful. That’s how this whole program came to be, is alongside of us fixing and flipping our properties because people kept asking us to teach them how to do this. Now, we work with them and have them work alongside with us as much or as little as they want, learning the entire process from beginning to end of the entire fix and flip process.
For a typical fix and flip, you have to find it, purchase it, fix it, and sell it. Walk us through those steps. If you’ve done 159, what’s the process of identifying a property?
Most of our properties that we get, we get at wholesale prices. We look for a lot of abandoned properties, distressed properties, and there are lots of them out there. Once we determine a property is distressed, we do contact the owner and find out. Sometimes it’s the property that’s distressed and sometimes it’s the owner that’s distressed, whatever it is. Our biggest thing is we leave every person, property, and community better than we found them. Whatever transactions that we have, it’s always got to be a win-win. Inside of finding these properties, people are usually very happy for us to take it off their hands. We say the scarier the better. We go into the very scary neighborhoods that most people won’t go into and start cleaning up the neighborhoods and having them be beautiful, which makes a big difference because that pride of ownership is a big deal.
At some point you were fixing and flipping, and then at some point there was a transition where you started working with other people alongside. What is the economic contribution or role of some of the folks that are investing or helping alongside with you?
How we have structured it for ourselves is that we already have the relationships with all the lenders. I can have a property approved and funded or the agreement to be funded within five minutes. We have a very, very strong relationship because our lenders now that we know what we’re doing and we’re going to make it happen every time. We are able to negotiate the acquisition price and most of the rehab costs of the entire project, and then the contractor and all of that. What they’re bringing would be 10% or 20% down on the acquisition and then whatever the holding costs are for that three to six-month period.
You’ve identified the property, you have an investor that provides the down, and then you have the acquisition cost and the rehab costs. 159 properties, that’s a fair amount to keep track of. How many folks are in your organization?
Altogether, our whole team, there’s probably about 40 of us.
On the crews, do you go out on the outside contractors or do you have crews?
We have outside contractors.
Each minutia is expanded. For the audience, how do people find you?
How did the name come about?
Through the founder of The Matrix. The Matrix is the parent company of the Flipping Females. We were all sitting around talking and what happened was through doing all these projects, we discovered that women are better fixers and flippers than men. When it came to the end product, men generally, it’s like there’s the gray palette or there’s the beige palette, and that’s the extensive as it gets. Where it’s the pallet boards, choose A or B. With the women, women have this love of having places be beautiful, and so the level of detail and who they are, they got to pour into it and have it be an expression of who they are. I really love these projects. When we were putting these projects side by side, one that one of our male rehab directors did versus one of our female, there was a stark difference. Inside of that meeting, it became a joke. It wasn’t meant ever to be a competition between men and women. It was very obvious that there is a pretty big difference in the end result. The Founder, Dan, he was just being Dan who was very funny, “All you Flipping Females.” It became this joke from there and we turned it into the Flipping Females because that’s what we do.
I’m sure there are stories where you’ve had some folks come in and put their funds together. Do you have a long time multiple project people involved with Flipping Females as investors?
We have lots of people that love doing what we’re doing and continue to partner with us on all our projects. For me, what’s even more exciting is they learn the whole process of fixing and flipping a house. Now, they’re onto the next level, which is we have a whole leadership track and now we’re training them to be leaders and be rehab directors. Now, they get to start training and mentoring others up and being able to do this. What’s extraordinary about that is we are expanding across the country into 110 major metropolises. We’re giving women this opportunity to pour their love into and have a full expression inside of having these spaces be beautiful.
What I love about it is that the ones who have repeat projects with us and who are part of the leadership training program, a lot of them are moms. They have kids, they have husbands, they’ve got lives. They even have other jobs, so they’re able to do this part-time and have fun here while they mentor and make a difference for others, and then be able to get paid at the same time to do what you love to do. That’s one of my favorite things. I remember when I was younger, my grandfather said to me, “Catherine, find something you love to do, find a way to get paid for it, and you’ll never work a day in your life.” For us, for all these women, that’s exactly what we’re giving these women as a vehicle to do something that they love to do, be able to make a difference in the world, leaving every person, property, and community better than we found them, and make a little extra on the side as well.
Find something you love to do, find a way to get paid for it, and you'll never work a day in your life.
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Folks go, “Why wouldn’t I just come in and do a project with you, learn the ropes, and go do it myself?”
They absolutely can. Some people do that.
What do you think the difference is for the folks that stay around and the folks that go out on their own?
It’s a couple of things. One, it’s time that people have, but at the end of the day, it’s people’s heart. The ones that stick around are the ones that have the heart to make a difference in other people’s lives. They want to be that contribution that has somebody have success wherever it is.
Some folks who are going to detect a bit of an accent. Where in the world did that come from?
I’m from northern Canada. Twelve hours north of Vancouver, a little town called Prince George. It gets to be minus 75 some winters, it’s really cold.
I have to talk about the story when you were a little girl on your bike, because people are going to go, “Canada, Bears.”
I was twelve or thirteen and we were out camping because that’s what you do in Canada. You go camping for fun. I was riding my bike down this path and as a kid growing up in Canada, you’re used to all the wildlife and you know what to do. You’re trained very early what to do. The bush beside me on the right-hand side started shaking and I look over and all the sudden, this tiny little bear cub comes, and he ran in front of my bike over across the path to the other side. Anybody knows, where there is a cub, there is a mama. Sure enough, the bush is shaking even more and all of a sudden, I see mom is on my right side and baby is on my left side. I spun that bike around and I pedaled so fast to get out of there because you never want to get between a mama and her baby. That’s one thing you know. I got all the way back. I remember I couldn’t even breathe and I’m trying to speak. They couldn’t even understand what I was saying. I finally caught my breath enough to explain that there’s a mama bear and her baby. All of the sudden, the alarm goes off and everybody has to get in their vehicles and wait. They contact the Game Warden and they come and take care of the mama and their baby.
There’s a proliferation of TV shows on fix and flip and rehab. At what point in time did that market got saturated or done or what condition causes it not to be advantageous?
What we teach is do the numbers and the numbers tell you what to do. Every single project that comes across our desk, we have a team of five different people that analyze the property and go through and do the numbers. We’ve all got our grand numbers for the project to move forward. The reality is there’s always going to be distressed properties. I don’t know if that’s ever going to go away. The property that’s fine right now, in ten years from now probably won’t be.
You drive by a neighborhood, the house there, it looks like it’s got weeds in the front yard. You go and you dig around. Walk us through the identification process. Does somebody go in? What makes or breaks the decision? Bad foundation?
It’s all about the numbers. There’s a few things that we look at. We look at, as much as we can, the roof, the AC, the electrical, the foundation, and then everything else is pretty much cosmetic from there. You’ve got the windows, doors, things like that. You want to look at the major items that would have a major cost. From there, we pretty much have a formula that we know how much each one of those items is going to cost or not cost. That factors into our formula, then we back it out and we’re able to determine what’s called the ARV, after repair value, based on everything else in that particular neighborhood. Then from there, we back out our formula and know how much we have to acquire it for and how much rehab we put into it in order for it to financially make sense. Then we have the conversation with the seller, how much they’re willing to sell it for. If it fits inside of the formula, then that’s how we move forward. There’s no emotion to it. There’s no, “This house is so cute.” It may be cute, but if the numbers don’t work, it’s not really cute. We like to say ugly is the new pretty. The uglier the house, the better.
What ranges of houses do you try to target your marketing?
We stay usually below the $300,000 mark. That’s after repair value. We find it to be our highest ROIs, and a lot of investors will stay out of those areas because they’re pretty scary. We have a joke. Some of these neighborhoods are two-gun neighborhoods. What do you in a two-gun neighborhood? You take three guns.
If you’re going in and you’re rehabbing a property and turning it into a livable home in a tough neighborhood, who’s the typical buyer in a tough neighborhood?
We could fix and flip a house, say over in Scottsdale, and the ARV on that would be $500,000, $600,000. We would put the same amount of money into it, but at the end of the day, the profit would be $50,000. That’s a nice profit, but then there’s the whole hold time. How many buyers are on the market? Looking for a house that’s $500,000 or $600,000, how long are we going to have to hold it? If we have a house that’s $200,000, we can make $50,000 on that, the outlay of money to make $50,000 on the $600,000 house versus the outlay of money on the $200,000 house is a dramatic difference. Your ROI increases on the $200,000 house. The next piece we look at is how many buyers are out there that qualify for a $200,000 house. There is a way bigger pool. The government’s got all sorts of programs to help these families who otherwise wouldn’t be able to get into homes and be able to purchase these homes. Our homes get sold very quickly.
If you’re going to go into a property, what are the typical one or two things that you see most commonly need to be repaired or rehabbed when you go in?
The common things are paint and floors. Fix the walls and floors. No matter what, no matter which property we go into, those two things are always going to need to be done.
You’ve got the property identified, you have your investor, you find it, and the crew goes in. What’s your typical timeframe between find and sale?
It’s generally less than six months.
That’s a pretty quick turn-around.
We’ve got our crews trained. They know exactly what we’re looking for.
For the detail folks out there, is there a software or a processed or collaborative software that you use to keep track of all your projects and keep the team pointed?
We use Google spreadsheets and a program called Asana. Those are the two main ones that we use, and all our systems and structures are built inside. This isn’t a complicated process, and people want to make it more complicated than what it is, and it isn’t that complicated. Once you get your systems and structures down and you do the project based on the numbers versus your feelings about it, it becomes simple to make all the choices inside of making sure that it’s a profitable and successful project.
As you move into newer territories, how do you develop the category or the group of folks that you’re going to train?
Lots of networking because we want to work with people that are excited about what we’re doing and committed to making sure that all the projects stay on time and on budget. It’s not what you know, but it’s about who you know. Just having lots of conversations and figuring out. I have people reaching out to me all the time through Facebook of different places. I’ve got some contacts there and we can start.
You use the same numbers and ROI stuff and they take it in and you supervise them, and they get it done. At the end of the day, cleaning up neighborhoods and making houses nice. I’m sure there’s a transformative effect in these neighborhoods.
We have so many of the neighbors come over after we’ve completed a project and are beyond thrilled about what we’ve done because a lot of these homes have some undesirables happening in them.
We don't ever push beyond what that particular neighborhood can actually handle, because it’s not economically responsible
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What’s the biggest misconception you think there is about what you do?
People believe that we’re driving up the prices too high inside of all the areas. When the reality is we are increasing property values for everybody in the neighborhood, which is good for everybody. All of our comps that we do are extremely conservative. We don’t ever push beyond what that particular neighborhood can actually handle, because it’s not economically responsible.
I can’t tell you how much I appreciate you taking time out.
I appreciate you. Thank you.
Catherine, thanks so much for being on the show.
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