“There are only the pursued, the pursuing, the busy and the tired.” ― F. Scott Fitzgerald, The Great Gatsby
For many people out there I am sure you have heard of shows like Flip this or Sell that house. Many of them are broadcast on A&E. One of these gems was a show called Flipping Vegas.
The show starred real estate investor Scott Yancey and his interior designer wife, Amie Yancey. What made this show stand out was the outrageous personality of its star, Scott Yancey. He could regularly be seen losing his mind over the tiniest of overages to his immensely short time table he gave to flip any house. It made for great television. I felt it was the funniest of all the house flipping shows out there.
Scott would regularly drive around in his Porsche (he loves cars) and go from house to house that he had invested in to inspect properties. His wife, Amie, could usually be found at places like Walker Zanger to purchase materials for all of the homes they were flipping. The couple were constantly bickering about house design, location, and finances. They were a riot.
What I remember most is that Scott was always very concerned about the budget as where Aime was not. She believed that a well-designed home sold itself. However, Scott did not always agree. He would regularly have a fit if she spent extra money or over-improved a house. It was hilarious.
“When you have a foreclosure sign on the house, it’s saying, ‘Vandals, homeless: Welcome. Please strip it,’ ” Scott told The Las Vegas Review-Journal of the properties he purchases. “We’re in a race to get it done and get it sold.”
So, without further ado, I give you what it’s like to flip Vegas.
WHAT IS FLIPPING VEGAS?
“The houses that are the worst to buy are the ones we save for TV because we know there’s a great storyline with it.” – Scott Yancey
Flipping Vegas was an American reality television series that aired in the United States on the A&E network for 5 seasons from June 18, 2011 – September 27, 2014. Featuring the husband and wife team, Scott and Aime Yancey. The couple would fix and flip homes in Las Vegas, Nevada. It aired on Saturdays. And ran for 41 episodes.
Meet the real estate players
Vegas was hit hard by the housing crash of 2007-2009. Where most saw disaster, Scott saw opportunity. He would buy low-priced and dilapidated homes in Vegas, fix and flip them quick for a profit.
Setting a quick timetable of about 4 weeks and even shorter budgets of approximately $10,000. A quick fix schedule and low budget is called flipping. Spend less money equals more or maximum profit. His opposite is Aime, who buys high-end finishes that are not in the budget, without telling Scott. Let the fights over the checkbook begin.
Here is some of the banter on this show.
Real estate agent: Can you all this done in a week? It’s a lot to do?
Scott: I turn and burn these suckers!
Aime: Scott, you’re so cheap.
Scott: Once again you are unconcerned with deadlines and bottom lines.
Aime: Give the house a great design.
Scott: This house is an ugly girl. Put lipstick on her, we’re not giving it plastic surgery.
That’s Scott, always keeping it classy. He works hard and lives his life fast. He likes quick wins and flips. I’ll give him this, at least he always kept it real.
In an interview with the Vegas Sun, Aime said, “I mean, I feel like I’m giving birth to each of them. I know Scott has timelines to turn them around fast, and we butt heads. He sees the bottom line, and I fall in love with the transformation. I can’t stop myself; I really need rehab for designers.”
They generally work with the same contractors and real estate agents to sell their houses. In addition, will also have multiple trades working on one house at the same time to keep up with Scott’s insane open house schedule (think buying a home, renovating it, and putting it on the market in 7 days). And yes, there was an episode that he tried to do this.
The show got is start from a conversation Scott had with some show business friends where he recounted how he had to pull out his Glock (he’s licensed to carry) on some homeless people that came at him with needles in a boarded up house. They recorded some footage of him (Scott paid for their expenses) at work and it got into the hands of someone at Lionsgate. That is how his reality show career got started.
Finance Lesson 101: You have to spend money to make money.
ALWAYS EXPAND
Expand. Never contract. – Grant Cardone
One of the best times to start a business is during a downturn. Scott is a businessman who owns a real estate brokerage called Goliath Company. He invests sells, and flips houses. In addition, Scott also was an executive producer of the show and an author. Reality television star is also one of his many titles.
When asked what it was like doing the show Scott stated, “It’s reality TV for a reason, but try working with your wife for 12-14 hours a day. [The producers] know our fans. They love it when I break shit, and that’s my favorite part. If I could take a bulldozer and knock out a shed, that’s great. Take a chainsaw to a wall, that’s great. Demolition is No. 1; drama is No. 2. And then education.”
The best episode I saw and my favorite was the Season 2 Episode 10 show entitled, “Yancey’s Eleven” which aired on February 16, 2013. Scott purchases 11 unfinished villas at Lake Las Vegas for a total of $380,000 and takes on the gargantuan task of getting them all fixed up at the same time.
A&E episode description(www.aetv.com): Scott takes on the biggest flip of his life having purchased 11 unfinished villas in upscale Lake Las Vegas with hopes of flipping all 11 in less than 45 days! It’s a risky gamble that could have a huge payoff…if Scott can manage to bulldoze through some unexpected and high-priced construction roadblocks.
Show me the money honey.
The couple then began doing seminars. A no-strings attached sort of deal. It started out for free with a preview, but then morphs into a sales pitch. Over three-hours attendees are enticed to pay a $2,000 fee for a second, more intensive three-day seminar. Those who paid and made the investment in the three-day event received yet another pitch to invest in the next level that costs a whopping $30,000.
I, personally, can confirm the first part. I was invited to a Yancey seminar. I went and it was basically someone coaxing and goading you to spend money (not the Yancey’s as they were not there). Basically, it was a high-pressure sales pitch. The free part was just to get butts in the seats. The free meal was a cold sandwich, chips, and a stale cookie. Although, it sounded good, and everyone acted professional. I refused to spend money going to yet-another seminar. After that experience, I swore off all seminars for good.
They said most people did not complete the problem because there was work involved. So, they quit. Customers cry foul. That they were not properly trained. Scam???
Finance Lesson 102: If you are going to expand and ask people for money, then you better bring you’re A-game and deliver. Better to write a book and sell it for a reasonable price, that provide the details of how you became successful then give people false hope and empty promises. A book is at least tangible.
A GOLIATH OF A TASK
“The main thing is that in TV land, they speed everything up. They [the viewers] think, ‘Oh, wow, it’s a breeze. They come in, and it’s done.’ It takes a long time to put them together, to pick out the fit and finish and work on the quality. They only see a glimpse of it.” – Amie Yancey
Scott started in real estate at a young age. He got advice from a friend to invest his $30,000 settlement from a car crash into real estate as his family was doing. Scott took the advice.
Forgoing finishing college he still found a way to make a million dollars. Even though he almost quit real estate after the downturn, overhearing a conversation between patrons made him change his mind. When he heard how little people were paying for properties in Las Vegas only to start renting them out to tenants, Scott saw a golden opportunity to profit. Why not buy at the bottom?
“At the next table, the discussion revolved around the Las Vegas real estate market and the fact that there were homes available to buy for as little as $36,000 that would rent out for $900/month. Just hearing those two numbers put Scott’s real estate brain into gear. Two things came to mind immediately, ‘You make your money on the buy in Real Estate’ and ‘fortunes are made in bad economies.'” – Scott Yancey
His task was to buy real estate at the bottom. Things have to hit rock bottom become they come back up. You can capitalize on that. It was risky and things were rough. Like me, quotes were in Scott’s mind: “Nothing great is easy” and “Debt equals drive.” Those helped him. He had this epiphany and ran with it.
Similar to the money epiphany I had in 2017. Once I figured out a way to save more, I began to do so massively. Start where I was at and work my way up. I started by saving $50 a month and then slowing increased my savings every day or month. Now, I save over $13,000 a year and increase that number every year.
Finance Lesson 103: Best time to start a business is in an economic downturn as fortunes are made in bad economies. For instance, when the stock market crashes, that is the time to buy.
COLLEGE DROPOUT TURNED MULTI-MILLIONAIRE REAL ESTATE INVESTOR
“I’m not a college graduate.” Scott told Vegas Seven. “I went to probably five colleges, and I dropped out of them all. I have ADD. I didn’t come from money. But you don’t need money to be a real estate investor, and that’s what I teach people. I did my first land deal on my own without any of my own money, and I netted $2.3 million. I can relate to most of the people who write to me and say, ‘I’d love to do what you’re doing. I don’t like my job, but I don’t have any money.’ Great, you don’t have to. You’re right where I started.”
Scott was hired as a real estate runner for a real estate attorney named Walther (Walt) J. Plumb III. His salary at that time was $5/hour. Walt ultimately became Scott’s mentor. He also convinced Scott to get his real estate license as his last 3 runners had all become millionaires. He ended taking his advice and making so much money in real estate, that he left college. He was making hundreds of thousands of dollars, which is a lot of money for a guy in his 20s.
He was making so much money for Walt that he decided to strike out on his own.
The $2.3-million-dollar deal allowed him to pay off all his credit cards and buy the care of his dreams, the Porsche. And put a million in the bank. He used his big payday to pay off debt. This is similar to what John Legend did.
See my post Money advice I got from John Legend
You can also regularly hear Scott complain about amateurs on his show.
In an interview with the Vegas Sun, Scott said, “but I think there are a lot of amateur-type flippers who have gotten in in the last little while, and they have short fuses because they’ve borrowed money to their properties. Scott usually pays all cash.
This is what Warren Buffet says about borrowing: “I’ve seen more people fail because of liquor and leverage – leverage being borrowed money.”
This is what I said about borrowing.
See my post Don’t take money too personal
He says, “if you don’t know what you’re doing, leave it to the professionals.” He stills relies on him and asks his mentor for advice. Looking up the couple net worth online yields results of $5 million each.
Finance Lesson 104: You can be successful without college. However, you need to decide early and when you are young what vocation you are going to do to try and make a living.
THINGS WILL AND ALWAYS DO CHANGE SO PREPARE
“Flipping is great at first to generate capital, but as an investor, the goal is to take your capital and invest it in rental properties. The rental properties pay you every month. Flipping, you make one payday; you’ll make $100,000 on a good flip. [Investing] that in a rental property [can} make you $5,000 a month. … It’s a lot less work to collect a rent check than to renovate a house.” – Scott Yancey
At one point, in an interview with Vegas Seven, Scott thought that the real estate market would change as it always did. In addition, that there is a false send of high-fiving.
Most purchases are all cash deals being done by investors. Lots of flippers have left and are out of the flipping market. People are buying and holding, which should be the real estate investor’s endgame. As far as renters for his homes go, he wants good tenants that resign every year and he only takes cash as payment. He also buys near hospitals so many of his renters are ER doctors and nurses. Basically, those with steady reliable incomes and paychecks.
I hear that.
I also read a real estate investing book that said a great place to buy was near college campuses. Get those college rentals going. Not bad advice. Pretty similar to what Scott has done.
I recently read that the government shutdown has closed up shop 4 times within the last 10 years. That is a huge problem for RE owners. Especially, if this trend keeps up and considering that furloughed contractors don’t get back pay when the government reopens.
See my post America is the land of loans
Not surprising. A home is only an asset if it can or does feed you. You can only get access to the equity when it’s sold. The only other way to make money is to rent it out. Either by the unit, home, or room. If you want to start a profitable real estate business and become a landlord, then you better have the funds to handle downturns, bad tenants, vacancies, and repairs.
Finance Lesson 105: All businesses need capital.
You can take that piece of advice all the way to the bank.
