Are house flippers investors or are they speculators? Episode #293

Hello. Welcome to Todd Miller TV. The subject today is are house flippers real estate investors or are they opportunists? So, I get a lot of people who come to me and say, “Hey, I’m an investor and I want to buy some houses.” And so, I realized that a lot of it is just a label but this is how it’s sort of broken down.

OK. Flipping a house is not really investing, OK? And you’re saying, “Well, but I’m taking money and making more.” And so, there are two sides of the equation here. Over here, you have investors. Investors get revenue streams. If you’re not getting your revenue stream from your investment, you’re not an investor. So, you have an investment. It gives you revenue streams, you become an investor.

Opportunist, you can call it entrepreneur, opportunist, whatever you want. It is more of an arbitrage situation. What that means is you’re buying from a source and selling to a different source. You’re buying from people who just want to liquidate properties. You’re selling to people who couldn’t buy the liquidated properties the way it is because it’s not financeable, it’s not in good condition, or they don’t have access to it. And you’re doing something called arbitrage.

So if you’re on this side of equation over here, you’re an opportunist. If you are on this side of the equation over here, you are an investor. So investors sometimes make money, sometimes lose money. The same thing with opportunists, sometimes they make money, sometimes they lose money.

But over here, you have to have a revenue stream. So I just want to sort of put that definition out there. There’s nothing bad about being an opportunist. A lot of times that word is used in a negative light but it’s actually just taking advantage of an opportunity to make some quick money.

You can be both. You can have some investment properties and then you can flip some properties and play on both sides of the fence. But they’re completely different philosophies.

Anyway, let me give you example. A couple of years ago, there were a lot of opportunists. People buying properties, flipping them and that’s almost gone because the source of that although that was trustee sale and it’s very difficult to do that. And a lot of those people have gone away.

But the investors are still here. They have always been here. They have never left. Some have made money. Some have lost money. Right now, they’re all doing pretty well because prices are increasing a little bit and they’re all getting revenue streams because properties are relatively easy to rent

So, I try to share with you my sort of philosophy on the different names. Whatever you call yourself doesn’t really matter but that’s sort of in the industry. When we hear those words, that’s what we think. You can just use the word flipper then we understand what that very specific and what that means.

So anyway, that is my update for today and hope to see you on another video. Thanks.

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