Ryan Pineda, self-made millionaire and author of “Flip Your Future,” never planned on flipping homes, and his path to the business started in an unlikely place: on the baseball field of the Oakland Athletics.
“I was a late draft pick, so I didn't have a lot of money,” he told Business Insider in an exclusive interview, “so I started working as a real estate agent in the offseason.”
There was just one problem: he hated his career as a real estate agent and was miserable.
This prompted Pineda to work hard. To make ends meet, he started reselling couches, appliances, phones, and other miscellaneous items on Craigslist. He soon discovered he had a knack for determining value and began making $6,000 to $8,000 a month from his business.
Shortly thereafter, Pineda saw an advertisement for a home flipping seminar, realized his thinking was small, and took action.
“I had about $10,000 saved up from reselling sofas and stuff, and I was fortunate to have zero debt,” he said, “so I was able to max out my credit cards to make the down payment.”
Pineda was able to raise about $50,000 he didn't have by maxing out his credit cards.
“That's what led me to buy my first property,” he continued.
Flips typically involve buying a home and reselling it at a profit after it rises in market value or is renovated. Though it's risky, the potential for profit has drawn big players like Zillow to get involved. The real estate giant entered the field in 2018 and made 52% of its third-quarter sales from its residential division.
Pineda made about $25,000 flipping his first home in 2015 and became hooked. Now, as a new millionaire, he's on pace to flip more than 100 homes by the end of the year. He's CEO of Las Vegas-based Home Run Offers, which buys homes directly from homeowners who want to buy them for cash.
How to get started
“It's really just a numbers game,” he says. “I've always been someone who understands value.”
Pineda believes this is one of the most important things for a prospective home flipper to understand: Value and numbers are all that matters. Don't overcomplicate the process, take unnecessary risks or try to force the deal, or you'll fail.
With all this in mind, Pineda recommends a no-frills approach for those just starting out in home flipping.
He starts with the price he wants to sell the property for and works backwards from there, subtracting costs and calculating profit at the same time, until he arrives at his highest asking price.
“You can learn that just by finding out what things cost,” he said.
Once he offers his highest price, he sticks to it, and if no agreement is reached, he moves on to the next deal.
“I'm not too worried about cash flow,” he said. “I'm not too worried about stock appreciation because I'm going to be buying and selling stocks.”
Although Pineda has made a lot of money flipping homes, he is quick to point out that not every deal is a success.
“Gratitude can hide a lot of mistakes,” he said.
He initially mistakenly relaxed his standards on risky property purchases as the Las Vegas housing market was experiencing rapid price increases, which resulted in him losing money and hundreds of thousands of dollars on bad deals.
Obviously, Pineda's strategy is not without risk, but he has learned from his mistakes and is no longer caught up in the emotions and excitement of market twists and turns.
“The most important talent is to have confidence and overcome your fears, because there's nothing so crazy in this industry that you need extraordinary talent to be successful,” he said. “You don't need to be the smartest person in the room.”
He concluded: “Anyone can do this business. Just give it a go.”