Mike Baird and Doug Clark sure wouldn’t complain if they were to become the "American Pickers" of real estate.
Like antiques dealers Mike Wolf and Frank Fritz in the hugely popular History Channel reality series, Baird and Clark find themselves poking around in decrepit buildings strewn with trash and rubble, hoping to extract treasure. They even have a tattooed, feisty female assistant back in their office who’s reminiscent of the "American Pickers" office manager, Danielle.
But in "Flip Men," a new reality series on Spike TV, Baird and Clark aren’t rooting around for kitschy pinball machines and vintage motorcycles. They’re pickers of houses — real estate investors who buy foreclosed homes sight unseen and then rehab and quickly resell them.
"Every house has a story," said Baird, who began investing in real estate right out of college about a decade ago and went into business with Clark, a former commercial airline pilot, in 2005. They estimate they’ve bought and sold more than 750 houses in the Salt Lake City area.
The investors first found themselves in front of a camera as they tackled an 8,000-square-foot mansion whose foreclosed-on owners had stripped the place of its fixtures and features, to the tune of about $120,000 in renovation costs.
"A neighbor said to us, ‘Have you ever thought about doing a reality TV show?’ " said Baird. The neighbor put them in touch with a producer of television commercials, who began working with the rehabbers to create a series of YouTube.com videos that documented the sometimes mysterious, sometimes cringe-inducing process of acquiring and reviving houses that have hit the skids.
"We created about 90 videos over a year and a half, and we were getting YouTube hits," Baird said. "It got to the point where we were introduced to David Broome, executive producer of ‘The Biggest Loser,’ " who was interested in documenting the backstory of professional flips.
In "Flip Men," the video cameras capture Baird at the courthouse steps, bidding on and acquiring properties that he’s never laid eyes upon, though the two partners rely on their encyclopedic knowledge of neighborhood real estate prices to make educated guesses about value, based on the street address.
"Maybe we’ve had a chance to drive by it in advance, but often we haven’t done that, and we never know what we’ve really bought," Baird said.
The cameras follow the two buyers as they break in to their purchases — courthouse sales don’t include house keys — and survey the situation.
"Then we figure, ‘Here’s what we’ll have to do to get it back on the market as quickly and as cost-effectively as possible,’ " said Baird, who is a licensed real estate agent.
In the inaugural episode, they find themselves the new owners of a squalid, debris-filled bungalow on East Burton Avenue in Salt Lake City, purchased for $63,931.
Clearly, squatters had been residing in the place, and the house held a further nasty surprise — signs of methamphetamine use, a discovery that brought interior renovation activity to a halt until a laboratory confirmed the presence of only a small, nonlethal amount of the hazardous drug.
In the end, construction crews brought the house back to life, though with a number of snags and unforeseen expenses along the way.
Six weeks after purchase and staged with furniture, the house went on the market. It took 70 days to find a buyer, though the house sold for $189,000, turning a profit of $65,000.
Meth aside, "I’d say that house was about typical of what we buy," said Clark. "It’s a little older than some of the ones we’d prefer to buy. They’re abandoned, there are structural issues — those are just things you have to deal with."
But the East Burton Avenue home took longer and construction cost more than many others, they said.
"Our average, rehab time is two to three weeks," Baird said. "And we’re generally investing 15, maybe 20 percent of the value of the home back into the rehabs. If we’d buy at $100,000, we probably put $15,000 back into it to get it into shape."
And typically, their homes resell within two weeks of hitting the market, always aided by furniture staging — "It gives vision to the new buyers," Clark said — and by their "huge following" among local real estate agents who know their work, they said.
The season’s 12 episodes will feature a variety of homes, culminating in a 14,000-square-foot mansion with a pool and racquetball court.
"It’s not just the bottom-feeder homes," Baird said. "These foreclosures are affecting everything from mansions to meth houses."
Although Clark and Baird made a profit on the initial house in the series, that’s not always the case, they concede.
"Occasionally, we don’t make a profit, and we show that on the show, too," Baird said. "We don’t win all the time. Anybody who’s telling you that they win every time is either lying or they haven’t done enough properties. We’ve lost $50,000 on a single deal, but we’ve had profits of $450,000 on particular properties.
"The $50,000 loss was a learning opportunity — an expensive one," he said.
They insist that their overall track record is solid. The key for anyone who wants to learn how to flip foreclosures is to start with a small geographical area and study it ruthlessly before bidding on a home, they said.
"You need to become a student of the game – get in your car and look at what properties are going for," Baird said. "Find a four- to eight-block radius and know everything about that radius — everything that has come up for sale, what’s under contract, how long they are sitting on the market.
"Know every house — every house," he said. "That way, you can move quickly and exploit value."
The business partners learned their market by playing a game, Clark said. "We would scout properties, and every time we saw a for-sale sign that had a listing sheet, we would guess the size of the home and what it would be selling for. We would look the numbers and give our best guess of the price.
"We got so good at it, we would never be more than 5 percent off," Clark said.
Not every purchase is a flip. They also buy and hold.
"The proven method is buy and hold," Adams said. "We flip so we can buy more long-term holds."
And they’re still learning.
"At any given time, we have 15 to 20 properties that are somewhere in the process, from just bought to under contract and closing tomorrow," Baird said. "A lot of times, those properties are the best indicators of value, of what we will be buying tomorrow. Every house teaches you a little more about the market."
Mary Umberger is a freelance writer in Chicago.
|Contact Mary Umberger:|
|Letter to the Editor|