Unlocking Wealth: 7 Essential Tips for Flipping Houses Successfully

John Harcar (00:01.535)
Okay. Hey guys, welcome back to our show. I’m your host, John Harcar, and I’m here today with Michael Higgs and what we’re going to talk about, you know, besides his journey in business and real estate and kind of what brought him up to today, you know, before we got on, he shared some things that, know, some things he’s learned in the fix and flip game and when doing houses that I think are just very important to hear. Uh, so we’re going to learn some great knowledge from that as well. Uh, remember guys, at Investor Fuel, we help real estate investors, service providers,

I mean, really all real estate entrepreneurs, two to five X their business. And we’re providing tools, resources in the community to scale your business to where you want it to be, which helps you live the life that you want to live. So Michael, welcome to our show.

Michael Higgs (00:45.356)
Thank you for having me.

John Harcar (00:47.071)
I’m excited to hear more about these stories. know I got like a little preview before. But before we talk about some of that stuff, tell our audience a little bit about you. What got you here today? Your journey in business and real estate.

Michael Higgs (01:00.718)
I mean before real estate I’ve really started off with when I was a child my father was a pilot but he had apartment buildings on the side so I’d been working since I was eight years old painting laying towel installing water heaters I did all that stuff I didn’t have my house since I was 14 so I always learned that but I went off into IT and I spent 30 years in corporate IT I’ve worked government I worked for military I’ve worked for all these people

John Harcar (01:13.417)
cheap labor.

Yeah.

Michael Higgs (01:24.686)
And finally with COVID when things kind of changed around, I was like, I got to do something different. And I said, I’m going back to my roots. My roots are in real estate. And I just always loved construction and flipping. So I said, okay, I scrambled up as much money as I could, knocked out a couple 401ks, put all the cash together and started off in my world.

John Harcar (01:45.631)
Hmm. As you were growing up, you were growing in one of the biggest or first questions I ask people is like, you know, back when you were younger or as you were growing up, was there any influence in real estate? You obviously had your father in apartments and you were working on them. So you had that first tangible thing. Why did you choose not to pursue that as a career and go into I.T.?

Michael Higgs (02:08.814)
I guess it was just that became my world. originally actually was, know, college is government and public administration ended up in DC and you just have to follow opportunity. had a job with that was a mix of that and got me into IT and IT was taking off and I was just getting better job, better job, more money, more money. It’s like that became my world and I just kept growing in it.

John Harcar (02:34.29)
That’s awesome. So you were in IT for, think you told me, 30 years. That’s a long time. And I know COVID came around. So what specifically happened? Was it a whole staying at home thing? Or what was the kind of thing that triggered, say, hey, I need to choose something new?

Michael Higgs (02:38.35)
Yep.

Michael Higgs (02:53.55)
Well, there was a bit of a push because I was working for cruise lines and cruise lines during COVID they laid off and I’m not kidding 90 % of their people. I was a program manager for cyber security, we’re point of sale systems running on all the new contracts to replace all the systems at this particular very large cruise line and with no contracts, there’s nothing to manage so.

John Harcar (03:03.55)
90.

Michael Higgs (03:22.05)
That was my job and I was like, what can I do? And well, again, I just, I went back to my roots.

John Harcar (03:28.274)
Yeah, that’s awesome. So what was the first thing you did? I mean, did you go seek out a mentor? Did you go seek out any coaching? Did you, what resources did you kind of look for right when you started?

Michael Higgs (03:38.702)
I didn’t really, mean, other than, as I said, I’ve had, you know, I’m watching HGTV and seeing the flipping shows and having my gurus and things like that. But I guess it just, I just dived in and just started researching on my own. And as I said, I started off trying to see, I went and bought a bunch of vacant lots up in North Florida and I was gonna start building. I got hooked up with a couple of GCs. We were trying to work around up there, but the margins just blew out.

And as I said, I just had to find something. I was like, you know what? I know I can flip. I know I can do this. I’m going to go and do it. And I have been.

John Harcar (04:17.032)
That’s awesome. So as you started doing that and building this business, you know, and we’ll talk about some of those other deals before, but overall, like what were some of the struggles or some of the things that you and some hurdles you encountered at the beginning?

Michael Higgs (04:29.006)
Well, in the beginning, was kind of like very easy to start the lots. I had the lots. I just cleared some of them and marketed them properly and got them sold and made profit. The first property I was a condo. And I was trying to do what a lot of flippers do is do a lot of the work yourself. It sounds heroic. It sounds all sexy. Look at me. I’m fiddling everything away. I’m fiddling on ceramic tiles, going home with my arms just being spaghetti.

John Harcar (04:50.174)
I’m a flipper.

Michael Higgs (04:58.382)
I found on thumbtack.com, which is 10 times better, it’s what Angie’s List used to be, found an electrician, because I had to replace the electrical panel on the unit, and he’s talking to me, and he kind of was smart in the field, and he said, you know, you need to stop doing this yourself. I’ve got a guy, he’ll come in, he can do it quicker and faster than you, and so you’re saving the carry cost. I didn’t have carry cost on that place, but I still said, okay. Guy came in, he gave me an incredible figure. I’m like, sure, okay, you do the work now.

John Harcar (05:04.435)
Right.

Michael Higgs (05:28.236)
and that just kind of set off. Although I am very, very hands on. As I put it, don’t cut corners, cut costs. If you don’t get some dirt under your fingernails starting off and you get hot and sweaty and nasty, you can’t do that in the beginning. You don’t deserve driving the Bentley Continental GT, you know, 10 years from now. Get dirty. And so I still stay dirty and doing all the work and hanging out with the guys and it was successful. And I still have all the same contractors working along.

John Harcar (05:56.615)
I mean, correct me if I’m wrong, but that experience just helped you grow that much faster, helped you learn that much faster and, you know, elevate your business that much faster, right?

Michael Higgs (06:06.99)
the G. I have I it’s a he’s a high end G. C. does a lot of multi million dollar properties I don’t know why he’s working with a small minnow like me but he is he’s extremely helpful and such he told me when it comes to the success for flippers he goes 70 % of people fail their first flips you go and you have your cash you don’t worry about permits you just get the job done and get out and you’re successful so it’s stage two you go out and buy three properties.

and you try to do everything with permits and you get into just a hellish world nightmare. And if you can survive that, your third set of property or set of properties is where you really start to grow. And he goes, you’re doing exactly that. And I am exactly on that path. I was very successful my first. I’ve been going through definitely learning experiences right now. So I’m trying to finish up this stage two and preparing for projects for stage three.

John Harcar (07:05.864)
Well, and thank you for sharing that because I think that is really, really important because probably the biggest chunk of our audience or people that are in the business are in that stage, right? They’re in that kind of like, I’ve done it on my own. I’ve had my proof of concept. I want to go bigger. It turns into a question now of not how, but who. Who are you going to bring in to do that how to scale up your business, right?

Michael Higgs (07:33.336)
Exactly.

John Harcar (07:34.108)
So that’s kind of the thing. So what does your current business look like now? Like where are you doing deals? What are you buying, et cetera?

Michael Higgs (07:42.542)
Um, but right now I have dropped down because my current property, single family house in Oakland park, Florida, which is part of the Broward County, Fort Lauderdale area is just been a massive problem child. am now on coming up to month 23 on this house, 13 months worth, 13 months worth of time, just dealing with the city building departments.

John Harcar (08:02.108)
What is going on?

Michael Higgs (08:09.454)
Literally when people say, you know, talk about what’s a curse word to me, the P bomb is permits. There’s nothing worse than the word permits. You say that to me, you’re insulting my ears. It’s just, it’s been such a hell on earth because just trying to get through at times and I’d go there in the first 10 months to be able to get the permits. month nine and 10, I was there at the building department every single day.

John Harcar (08:16.19)
P-Bomb.

Michael Higgs (08:34.306)
And the paperwork could be lost. They’d find it on the floor somewhere. They’d find it in a closet. they’ve got this problem. you didn’t dot the I on this. Literally, I got failed on an engineering letter because filling in the carport, two windows, the engineer accidentally only put window. So they failed it. Even though the blueprints have two windows, they failed it. It’s just insane. And well, you’re.

John Harcar (08:37.949)
Mmm.

Michael Higgs (09:00.012)
rebar overlapping supposed to be 30 inches. Whoop, it’s only 29 inches. Fail. It’s literally come down to things like that. And then the roof, I thought I could save the roof and I certainly learned some things about insurance and roofs. That’s a whole long story. But let me tell you, people need to really pay attention to insurance when they’re getting a property that they want to sell. Is it insurable? It’s a huge, huge conversation.

John Harcar (09:14.782)
Okay.

Michael Higgs (09:29.838)
the roof. We found out the roof was it looked good underneath but when you looked down from the top you could take a nail with your finger and push it through the rafters. It was so bad. So the entire roof structure had to be completely removed which then meant we went had to go through revisions to the permits and then revisions to the revisions to the permits. yeah and then just inspection after inspection after inspection it’s just been.

John Harcar (09:50.641)
Mm-hmm.

Michael Higgs (09:56.814)
In just one day, we poured 15 yards of concrete into this house from 1953. It’s just been, you know, we’re on limited time here, so I’ll try to cut myself off a little bit there. But it’s been, can even, if I can quickly show you what a picture of it will look like, how quickly can I get this open? Here’s a good example. If you can see that, those lines,

John Harcar (10:23.601)
Mm-hmm.

Michael Higgs (10:26.094)
You now have to fill in all the concrete walls with rebar and concrete on existing houses. And the bond beam up on top had to be doubled for the new roof and concrete and rebar filled. The cost just have gone through right now on this current property. I’ve spent about just on basic stuff, over $300,000 in just supplies and labor. Yeah.

John Harcar (10:48.637)
What?

How, okay, what’s the ARV on this house? I mean, there’s gotta be a couple million maybe, right?

Michael Higgs (10:55.726)
Oh, no, it was. I bought it for $3.375, and originally I was going to be fine at $5.75. Then the market put it up to about $6.80, so I’m like, all right, I’m hanging in there. But then all the problems with the permits and the permit revisions and the revisions revisions, and then the whole new roof, it has pushed everything back and all the costs out. So right now, financially, this could be a flop. I may have to take this as a learning experience.

John Harcar (11:22.108)
Yeah.

Michael Higgs (11:25.194)
It’s also taught me that new construction is probably going to have to be the way to go because renovating old properties, the cities are making it impossible.

John Harcar (11:35.198)
I’m about to say, is that something new that the city had passed or legislation that came that you have to do all the concrete and the rebar and all that?

Michael Higgs (11:42.542)
the whole house rewired and the panel done off with the new and not GFC eyes you have to have a AFC IGF CI mix for the electrical nerds out there when they came and did the electrical inspector inspector goes yeah we just changed the codes last month and I had to redo the entire job all over again rewire the entire house again.

John Harcar (11:45.15)
Wow.

John Harcar (12:10.056)
Wow.

Michael Higgs (12:11.414)
whatever they want. So it’s really becoming just too difficult. You have to build new. Flipping is becoming near impossible.

John Harcar (12:18.78)
I mean, that adds another layer to your due diligence is not necessarily checking everything and checking it twice in a sense, but now you gotta check the law or you’re gonna check the regulations. You gotta be like weekly, maybe monthly look and say, hey, have things changed. That’s incredible, right? Wow. Okay. So how do you think that property is gonna end down? I mean, where are you at with it? You said 23 months, you’re still working on it?

Michael Higgs (12:49.038)
Things are still going through right now. I’m going to try to do a whole tail on it. Just see if I can get, you know, just walk with at least some sort of dignity. The property is, you know, brand new roof, new windows, and it’s all permits in place. So as an investor slash construction special, I’m hoping I can at least pull out enough that I can walk out, you know, lick my wounds and go on to stage three on a, you know, new construction, more exciting project.

John Harcar (12:54.033)
Okay.

John Harcar (13:19.122)
Yeah, awesome. Okay. Well, cool. So where your plan? What are your scaling plans? Like, where do you want to grow your business? What’s your plans for that?

Michael Higgs (13:28.078)
Certainly, is not in Broward County anymore, that’s for sure. Been looking up north and in Palm Beach, because there’s still quite a bit of land up there, huge amount of growth. Palm Beach County is now starting to become the place where the huge money accounts, not just regular banks, but the big wealth management accounts, they’re all moving to West Palm Beach. And there’s massive amount of million dollar homes going up there. But one thing learned down here is,

John Harcar (13:32.636)
Why not?

Michael Higgs (13:56.472)
When you start building all these beautiful new communities, there’s no affordable housing nearby. So if you’ve got supermarkets or fast food stores, no one’s gonna go and work at those places, because you can’t drive 30 or 40 miles to go get a minimum wage. You need to have affordable housing nearby. Plus, when it comes to the game of either building or flipping, your money comes from how you can churn and burn. How many properties can you roll? Yeah, okay, you built a…

John Harcar (14:12.104)
Makes sense?

Michael Higgs (14:25.314)
to a two million dollar mansion, it took you two years to do. That doesn’t work. That’s not working in these days anymore. It’s now either you’re going to build the monster mansion so you make something after two years, or as I see it, even just Palm Beach County alone and down here, they need 80,000 affordable housing units and no one’s building them. Now, tiny homes, great. Everyone loves them, but their trailers, their most

John Harcar (14:27.89)
Yeah.

John Harcar (14:52.712)
Yeah.

Michael Higgs (14:53.504)
trailers and you’re not putting a trailer park in Palm Beach County, that’s for sure. Why can’t we build actual homes that are tiny homes and put them up and people can afford them? You get the American dream. You get sort of a one-one crappy condo with an HOA and assessment fees. You have your own land, your own house, your own driveway, your own yard. I mean, that’s just beautiful dignity. And my little spin on it is I would love to focus that on veterans.

John Harcar (15:17.576)
Yes.

Michael Higgs (15:22.486)
especially homeless veterans, because then I can work with veterans groups like Tunnels to Towers who buy homes for the veterans. I can get the homes pre-sold while I’m still building them. And if I can build a house in two to three months, it’s a win-win for everybody.

John Harcar (15:39.698)
That’s a great, plan. That’s a great concept.

Michael Higgs (15:42.988)
Yeah, that’s my stage three. I really am excited about that and I’m really trying to work on doing that and finding a more alternative building methods.

John Harcar (15:53.811)
That’s awesome. And I’ve interviewed some pretty intriguing and interesting different type of building methods. I’ll try to find some of those podcasts and send them over to you. Well, that’s awesome. So anybody getting into the business right now, what type of advice would you give them? If they want to start flipping homes or they want to get into real estate, what’s some advice you would think would help them be set up for success?

Michael Higgs (16:17.294)
I mean right off the bat you’ve got to have the personality for it. This is no longer just the days you can just go out, buy the property, do some work and get it done. This is a rough and tumble business. It really has become that way and you can get yourself lost in it. There are days where I’ve come home and just pounded on the desk like WTF. You’ve got to have a constitution for this and that sounds like just everyone says, you got to be strong but

Flipping has changed. as I said, I’m very extremely lucky to have fantastic contractors. But that’s rare. Rare. When I was just trying to find the H-Fractor people for the air conditioners, it took me, I went through about 10 different companies and every one of them said something where I just said, you’re full of it. No, get out of my property. I know you’re messing with me. To find that, you

John Harcar (16:56.862)
Rare, yeah.

John Harcar (17:12.21)
Mm-hmm

Michael Higgs (17:15.918)
that’s something you really have to work at. You’ve got to do your homework. I mean, my appraisal skills have definitely grown vastly. If I can walk into a property now, now I know, are all the egress points have double rebar filled cells on either side? You know, you can tap the wall and find out what’s the word like. If there’s termites there, I mean, just walk unless you’re getting like a half million dollar house for a hundred thousand. If there’s termites, walk. I can tell you that because that was that’s a learning lesson on this property.

John Harcar (17:42.59)
gonna cost you too much.

Michael Higgs (17:45.59)
the termites were in areas where i just couldn’t see even though the roof was exposed so just you gotta have the right you know gravitas in tight inside of you and just be prepared that you’re gonna get some financial punches and contractor punches and you’re gonna get headaches and it’s it’s a lot of stress and it can it can take you down and seventy percent of people feel their first look just personality you’ve got to be ready for what’s coming

John Harcar (18:10.866)
Yeah, it is definitely a business where you got to have, you know, Rhino skin or thick skin to be able to to persevere. guess you could say, man, I appreciate you coming on here and sharing all this stuff. So if there’s some folks that are listening to you right now that, know, they they want to learn from you, they want to reach out, maybe do some business with you. What’s the best way for them to connect?

Michael Higgs (18:33.678)
Reach out at my email info at flipping florida 101 comm and Take a look at my website and take a look at the videos and see but as I’ve said right now I’ve only got one set of videos up there But you can see some of the foibles and things that I’ve gone through sometimes where I just have to kind of driving along laughing it off and Just showing all the things that I’ve

gone through at least on my first flip and I’m trying to get more videos out there but they can reach to me at that address, email address.

John Harcar (19:07.295)
And I’ll put all that stuff in the show notes. So guys, you could get a hold of him anyway that’s down there. Thank you so much again. Michael, great information shared. Guys, I hope you at home took a lot of notes. And I hope you enjoyed this podcast. Michael, thank you again. we will. Awesome. We’ll see you guys on the next one. Cheers.

Michael Higgs (19:24.802)
I had a great time. Thank you for having me.

Michael Higgs (19:29.55)
Cheers.