They’re back …
2012 has seen the return of a few apex predators to Massachusetts, from the sharks off the Cape’s coast to a black bear spotted in Brookline. But perhaps the most surprising creature to be rediscovered gathered recently behind the closed doors of a conference room in a Downtown Boston hotel: Hundreds of wannabe home flippers.
The almost 300 aspiring real estate wheeler dealers had come from as far away as Kentucky and Wisconsin, and as near as Sudbury and Bedford, to get expert coaching on how to master the flip from a few once-familiar faces. The conference was sponsored by Fortune Builders, a company launched by Than Merrill, Paul Esajian and Konrad Sopielnikow in 2006. Merrill and Esajian, along with Esajian’s brother J.D., appeared on A&E’s “Flip This House” in the mid-2000s, when their company, CT Homes, specialized in flipping homes in the New Haven market.
The interest sparked by their television fame led to their spinning off a real estate coaching firm, Fortune Builders. The company offers some free one-day or short weekend seminars for a few hundred dollars, but serious aspirants are urged to sign on for “master” courses which can cost tens of thousands of dollars and include on and offline coaching, business software and more intensive workshops, like the four-day course that lured students to Boston.
Included in the package was a tour of three local properties in the process of being flipped by three local real estate investors. Two of the three investors – Aaron Breen and Delince Louis – are former students themselves; the third, Marina Hauser, is a former CT Homes employee and real estate coach. Louis, Breen and Hauser formed Beantown Property Group earlier this year. They have five properties in the works and about 10 more in the pipeline, Hauser said.
“Despite all the doom and gloom you hear in the media, we really been successful over the past couple of years being able to identify undervalued properties and make a nice profit off of them,” Breen said.
Searching For Gold
That kind of confidence in the prospects for the real estate market was not in short supply among the crowd, which included a mix of experienced property managers and investors, along with complete newbies. The group cheerfully tromped through muddy backyards, peered into darkened attics – one well-prepared woman strapped on a headlamp before mounting the stairs – and diligently counted windows and scribbled on worksheets as they learned how to estimate the costs of repairs and upgrades.
“We could make $300,000 a year. Do one a year …” one man murmured to his wife as the group pulled away from the first example property, in tony Winchester.
Beantown hopes to list that home – to which they’re adding a two-story addition and a finished basement – for something just south of $1 million. The second of their flips is a Roxbury triple-decker that required a gut renovation, structural reinforcement and water damage repair. The trio is considering converting the refurbished building into condos.
“Properties which we picked up in the springtime have considerably gone up in value when it’s time to sell. It’s a huge improvement in terms of value. We’ve seen a complete turnaround in the market,” Louis said. He added that their most recent listing, in Dorchester, received 13 offers and is now under contract for more than the asking price.
“Certainly, in 2008 to 2010, when the market crashed, a lot of people exited real estate. Now it’s more a positive environment. Boston is definitely one of the markets where it’s heating up,” Paul Esajian commented. “I saw a switch – buying and selling houses a year ago was very different. But this year, 2012, you’re starting to see people getting excited again.”
Bigger Paychecks
Excited enough that the Fortune guys are planning to launch a national brokerage brand, Realty National, aimed at real estate investors who are looking for someplace to “hang a license.” Realty National would act as a sponsoring broker, giving investors with real estate licenses access to MLS listings and help in marketing their properties.
More than a few local attendees agreed that the time was ripe to re-enter the market.
“I had done a few short sales for my clients, and I’d been getting into that over the past year or so, but I’d never done a rehab,” said Ryan, a real estate agent in Concord who had signed up for the course.
His motivation for wanting to take the plunge into house-flipping was simple, he said: “Bigger paychecks, and you’re looking at about the same amount of time invested, five, six months, as you do with a retail clients. I’m looking forward to getting my first rehab under my belt.”
Palma, a student from Sudbury, said she was looking forward to switching careers from human resources to real estate. Asked if was worried about the state of the market, she answered without hesitation:
“It’s always time for real estate,” she said with a laugh.
Email: csullivan@thewarrengroup.com
