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Egypt Sherrod knows how to create opportunities. Before hosting two of HGTV's most popular shows, “Property Virgins” and “Flipping Virgins,” she was a host at one of New York's highest-listened-to radio stations, WBLS 107.5. Eventually, Sherrod used her experience in radio, where she interviewed celebrities like Prince and Oprah, to land an opportunity to audition for HGTV's new show, “Property Virgins.”
Sherrod was already a licensed real estate agent and homeowner, having purchased her first property at the age of 24. With her bubbly personality and practical advice, Sherrod has coached first-time property buyers and property flippers, providing her at-home audience with helpful real estate guides along the way. Today, she is a successful author, speaker, and CEO of her own real estate company.
We sat down with Sherrod to talk about what she's learned in her years of flipping homes, why buyers should take advantage of today's low interest rates, and the best real estate advice she's ever received.
Apartment Therapy: In addition to your own projects, you have years of experience helping people buy, flip and sell homes. What do the most successful flips have in common?
Egypt Sherrod: It is always said in the industry that you either make money or lose money when you first acquire a property. That being said, the most successful property flips are when the investor does their homework and the numbers make sense up front. If you overpay for a property, you will spend the entire process of flipping trying to dig yourself out of a hole. Don't overpay for a property. Always leave room for unexpected expenses, get proper repair estimates, and complete the process quickly. No matter how much you love the property you are flipping, if the numbers aren't working for you, neither should you. I cover all of this and more in my digital program, FlipWithEgypt.com, which walks you through the process of successful property flipping from start to finish.
AT: In your book, Keep Calm…It's Just Real Estate, you write that you bought your first property at age 24 and flipped 12 properties by the time you were 30. You're currently the CEO of Egypt Sherrod Real Estate Group. Have you ever had any real estate regrets?
ES: Yes, like any investor, I have some regrets, mostly about real estate that I gave up.
AT: What role does credit play in flipping a home? Can potential buyers with bad credit participate in flipping a property?
ES: Credit is always important. But believe it or not, it's possible to flip real estate even if you have no credit or less than perfect credit. Hard money lenders look more at your business plan and overall opportunity than at your personal credit history. Private lending is also a great place to start when looking for funding sources if your credit isn't so good. Depending on the type of deal, you might even be able to get into crowdfunding. If you have no credit or capital at all, wholesaling can be a good avenue. This way you can get into the business with no capital and still get a cut of the profits.
AT: Do you think it's helpful for someone wanting to flip property for the first time to be a homeowner first? Are there any lessons you can learn from being a homeowner that will help prepare you to flip a home?
ES: There are pros and cons to each. I was flipping properties before I had my own home. I was cash rich, so it was less of a strain and I could take more financial risks. But if I had to do it over again, I would have secured my own home first. Homeowners can build equity and borrow against their home with a home equity line of credit. This is another great way to scrape together cash for investment. The key here is to pay off the home equity line of credit as you make a profit.
AT: Mortgage rates are still very low right now. Do you think now is a good time to buy, sell or resell a property, or are there other factors that determine the right time to resell?
ES: Yes, interest rates are historically low. In fact, they are the lowest they have ever been in my lifetime. In my opinion, any time is a good time to invest in real estate. If you talk to anyone who has made a huge amount of wealth, I guarantee you that a significant portion of their portfolio is in real estate. The only thing they will never make money on again is land. So, own as much land as you can. Just be sure to do your comparisons and know your market area. Know what types of properties will appreciate in value, rent for the highest amount, and receive the most offers for development. You will reap the most rewards if you are courageous and explore opportunities that others may fear.
AT: What is the best advice you have ever received about buying real estate?
ES: Never get emotionally attached, always have an exit strategy, and never sell if the property will pay for itself.