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Home flippers agree - it ain't easy Add to ...

They both speak of their "passion" for design and real estate and they have turned their home-flipping experiences into starring roles on television shows about the subject.

But Peter Fallico, the Toronto-based host of Home To Flip on HGTV Canada, is still in the game.

Maryse Derouin isn't. The Ottawa-based mother of four and her friend Sandy Niemczak starred a few years back in The Real Estate Adventures of Sandy and Maryse on the W network. When the show was over, Ms. Derouin went back to her nine-to-five job as an optician.

"There was just no money to be made in that," she says about flipping homes.

Mr. Fallico, who is looking for his next big project, scanning estate sales and letting agents scour the market on his behalf to find that next diamond in the rough, obviously doesn't agree. He admits to selling his last house, the subject of this season's show, in the fall and making a healthy profit, but won't give numbers because he doesn't want to give away the show's finale.

He does allow, however, that the perception of huge windfalls in flipping is wrong.

"I would never, never say it's easy money."

Ms. Derouin, who flipped two houses with Ms. Niemczak, said they made about $20,000 on each flip - or $10,000 each.

"About $10,000 for six months work - that's not a whole lot of money."

Mr. Fallico's approach to flipping is quite different from Ms. Derouin, but both agree that the first, most crucial step is to find the right house. It needs to be in good location, with good "bones" but in desperate need of aesthetic work.

They're not easy to find, especially as the market gets crowded with buyers with the same mission - purchasing a fixer-upper to renovate and flip.

In Ms. Derouin's case, her first house (in 2006) took a matter of days to find; the second, two years later, took almost six months. She and her partner were looking at houses in the $200,000-$250,000 range and found some pretty tough competition.

"There are so many people doing flips now, the good houses go quick," she says. "It's harder."

Mr. Fallico, who sticks close to west-end Toronto, says he knows exactly what he's looking for. "I'm not interested in buying someone else's renovation. I'm hoping that they have taken good care of the roof and done all the sort of structural repairs to take care of the home, but I generally look for stuff that hasn't been aesthetically addressed. The kitchen is outdated, the bathroom is outdated. That kind of thing."

Over the years, the prices of homes he's bought have risen. "My first house was $280,000, the next one was $350,000, the next one was like $500,000. I'm scared of those million-dollar homes but maybe that's the next step for me."

The price may be higher, but his approach hasn't changed.

"I am very conservative financially," he says. "Very conservative."

That means strict budgets for renovations, even when they're as high as $150,000 to $200,000 (with another 10 per cent set aside for hidden costs).

More importantly, for most of his houses, he moved in - saving the cost of carrying two mortgages.

"I am at the point right now where I can carry two places because I've been doing this enough and I've made some money, but generally I'll live in the properties in order to avoid the double payments."

His financial imperative: Do everything you can to make sure you are never forced to sell for financial reasons. Always be prepared to wait for the right opportunity.

"That is the advice I give people: Don't set yourself up so that you have to sell."

It's another reason why he moves into the places he renovates - if the market isn't right when it's time to sell, he'll just stay and wait until it improves.

"I don't believe in these quick flips. If you can do it within a year, that's great but these people who expect to do it within six months, well that's ridiculous.

Mr. Fallico admits to feeling anxiety with each project he takes on: Will the place sell? Will he make a profit?

Ms. Derouin claims no such anxiety but does admit that she and Ms. Niemczak had to sell quickly because each month was costing them money. On the other hand, she says that they purposely picked a neighbourhood where houses always sell fast. "We knew they would sell like hotcakes."

Her biggest lesson, she says, came in what she learned about herself. She and Ms. Niemczak were both crazy about real estate, but it turned out their interests were quite different: While Ms. Niemczak enjoyed the renovating - "picking up saws and all that" - Ms. Derouin found she enjoyed something else altogether - choosing the finishes "and seeing it all come together."

If she did it again, she says she would hire people to do what doesn't interest her. "I'd hire people to do the work, and obviously I would be picking everything, and we'd get in and out a lot faster."

Mr. Fallico agrees that you have to know what you can - and can't - do to make the best of the experience.

He hires contractors to do the major work and he takes care of all the "bells and whistles."

A graduate of the furniture production and design program at George Brown College, he's had experience with woodworking and other projects around the home.

"I'm pretty handy so I'm fine with installing my own light fixtures and window treatments. I'm not rewiring or replumbing the house. I'm painting the house."

He has strict rules about what he spends money on: "The one thing I will not compromise on is the skill level of any of the contractors or any of the labour people who are doing the work.

"You don't need a $500 kitchen faucet, you can buy some pretty nice ones for $129."

"That's where people screw up, they go crazy with the finishes. You don't need crazy unnecessarily high-end stuff."

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