How a House Flipper Went From Quick Flips to a $40M Development

TIM Kihiko (00:00)
yeah. So what happened is that actually what happened is that I, I knew of, and I had about flipping and then, you know, a lot. And then, what happened is I actually did, I got in a, in a, I always wanted to do it, but I was so scared of it. I just thought it was too complicated and everything. But then I got in a very serious car accident.

You know, and then I literally I almost died. I broke my my two knees, my ankle, my hip, everything. And I was like, shit, I almost died without actually doing the one thing that I wanted to do.

Joseph Crooms (02:12)
Hey everyone, welcome to Investor Fuel Real Estate Pros podcast.

I’m your host, Joseph Crooms. Today I’m joined by someone I’ve been looking forward to chatting with. His name is Timothy who he’s gonna be getting making s he’s been making some serious moves in the real estate industry, especi especially flipping. So he’s gonna talk some more about that. Timothy, say hello everyone.

TIM Kihiko (02:35)
Hi, hello everyone.

Joseph Crooms (02:37)
Great, great. I think our listeners are really going to take something away from how you’ve been approaching the the flipping industry. We’re gonna talk about how you raise capital and stuff like that. So let’s dive in. So, first of all, for people who may not be familiar with familiar with your world, give us the short version. What’s your main focus these days? What markets and what markets are you operating?

TIM Kihiko (03:01)
All right, I’m in Boston, more on the kind of, they call it the Merrimack Valley. So I’m in Lowell, know, Haverhill and stuff. I do go up a little bit in Fitchburg, but mostly I work and I’ve been working in Lowell, you know, for the last, let’s say 20 years now.

Joseph Crooms (03:24)
Hm. And and what’s your primary focus? What do you focus in order,

TIM Kihiko (03:28)
My primary focus right now has been flips, which is to buy something that doesn’t need a lot of work and then kind of turn it around very fast. Usually my turnaround is about a month, so it’s basically doing them quickly. I used to do the big flip, but they do take a lot of time and then they do have a lot of headache, so now I’ve been doing like

I figured it out, I’d rather make 40, 50 quickly than aim for 100k, then it takes 6 months or so.

Joseph Crooms (04:10)
How long have you been doing this?

TIM Kihiko (04:12)
I’ve been doing it since I’m a licensed broker. I’m also a licensed, you know, contractor, but mostly I was doing buying and selling. started, when I started, I was just renting. I was just a rental agent. And then, hey, I’m looking for a tenant here. I’ll fill in your unit and stuff like that. And then I transitioned to selling, buying and selling. And I was like, oh, this is good buying and selling. And I was selling it.

to contractors and stuff and be like, hey, I have a good deal here. They’ll come in, they’ll buy the house, and then they’ll flip it. And I was like, oh, you know, I think I like that, you know? And then at the time, obviously, I thought it was much easier than it is right now. And then at some point, and then it kind of, you know, it kind of transitioned. And then you see, know, also to doing big flips and stuff like that.

You know, right now I’m even now moving to the next stage where I’m doing like a big development, is, you know, phase one is going to be about 11 million, you know, total projects.

Joseph Crooms (05:22)
Wow, that’s amazing. that’s not easy in this kind so let’s talk about, you know, how you made the transition. So you started, you know, w how did you what was your first deal like?

TIM Kihiko (05:35)
My first deal in selling all my first deal in the flips.

Joseph Crooms (05:47)
Let’s let’s talk about both. let’s talk about what sold and what caught your eye, like you know what, I’m gonna try to flip and what was that like?

TIM Kihiko (06:42)
yeah. So what happened is that actually what happened is that I, I knew of, and I had about flipping and then, you know, a lot. And then, what happened is I actually did, I got in a, in a, I always wanted to do it, but I was so scared of it. I just thought it was too complicated and everything. But then I got in a very serious car accident.

You know, and then I literally I almost died. I broke my my two knees, my ankle, my hip, everything. And I was like, shit, I almost died without actually doing the one thing that I wanted to do.

So as soon as I healed, I was like, OK, heads on everything, everything I’m scared off. I got to go out and do it. You know, I loved, you know, you know, off topic. I loved motorcycle.

And, but then I was like, this is too scary. I can’t do it. So right away I got myself a motorcycle and I was riding it. I was like, I almost died in a car. anyways, I might as well. And then the next thing I did is I got a flip. The first flip was easy in a sense of, in a way of getting in the owner had a house and you know, they wanted a hundred and they wanted 120. All right.

And then I said, you know what, instead of you getting 120, how about, you you bring it in, you give me the house, I’ll fix it up, and then we’ll sell it. You know, we’ll fix it up and then we’ll sell it. And then so that’s how I got in. So when I went to the hard money lender, I told the hard money lender, yeah, I don’t have the money down, but guess what I do have? I do have this house. So now…

You have it, the house is worth at least 150, and then you give me another 150, and then we go ahead and then we’ll go ahead and then kind of go into it.

Joseph Crooms (08:40)
Mm-hmm. How many houses have you sold in s in the last actually doing this? How many houses have you said you flipped in the last say five years?

TIM Kihiko (08:50)
Yeah,

mean, total, I’ve been in both ends. I’ve been in total of 375 transactions. That’s the transaction I’ve been in. And those transactions is either I’m a broker on one side or the other side or I’m the seller.

and stuff, but those is total transaction that I’ve been on.

Joseph Crooms (09:19)
Let me ask you this Timothy, how do you keep the balance between a broker and a seller? Tell us how you balance that.

TIM Kihiko (09:26)
So now, really, my key happiness is the flipping, right? So, you know, now I’m not out there looking for someone. I’m not out there really looking for somebody that’s looking, especially as a looking for a broker. I’m not there. But if I have a family friend, close friend, past client, somebody I know, they say, Tim, can you help me out with this transaction? Then I’ll go ahead and do that.

But to the most part, the only time I become a seller is if, seller’s agent is if people, if the house doesn’t need too much work, you know, in a sense, and then, and they want retail. So, you know, the house look good, doesn’t need too much work. And then we can, know, then I become a broker. And then most of the time it’s like, hey, okay, no problem.

I’ll come in, I have my crew, they’re very first, you know, we’ll paint three days, we’ll paint the house, we’ll do this, they’ll remove the trash, we’ll get the house in the best looking position, and then I’ll go ahead and I’ll sell it for you. So that’s really when I’m the broker. And then on that sense, I mean, I’m marketing it and stuff, and then, you know, that part is kind of taken care of, to the most part.

Joseph Crooms (11:22)
How has you having your own sort of construction team benefited you when you flipped your homes? Can you s share that with us?

TIM Kihiko (11:30)
Yeah, that’s a big benefit. That’s a very, very, very big benefit, you know, because when I was doing it is at the beginning is that I would hire someone and then I would never see them at the job. It would always have other guys doing it. The guy is getting the money. And then at the time I found out he was actually when I was starting this pain daily rate at the time was like $80, you know.

And then the guy’s doing everything. Meanwhile, the guy’s taking a big check. He’s out there mixing my money with the other project. doesn’t, you know, and stuff like this. But, you know, not only has it controlled the cost, it has controlled the timeline, you know, because which is that’s, you know, the bond rate, that’s what’s going to kill you when this, when it comes to flipping. So when you get somebody they are asking you 10, you know, 13 % on interest.

on a monthly basis and then you got a contractor that is not aligned with you, then that’s a challenge. Of course, we still have challenges because we have to wait for the electrician because we haven’t hired an in-house electrician. We don’t have that much volume or an in-house plumber. But at least to the most part, we need any other job get done. We got a team of people to get that job done.

Joseph Crooms (12:54)
So you sort of been talking about and that’s not easy because you had to build those relationships and you establish a team. Kudos to you, man. I th that’s very good. Timothy, what’s been keeping your machine running smoothly lately? What

TIM Kihiko (13:10)
I think I have one good relationship that that’s the main thing that is a guy that I’ve been with for now like almost let’s say 12 years. You know, there’s one guy that’s been consistent and you know, our personality kind of meshed together. So that’s the one guy that’s been helping the business kind of run very smoothly.

Joseph Crooms (13:36)
And what would his what would his position be?

TIM Kihiko (13:38)
He’s an outside manager. He’s a guy out there. He’s a guy that knows how many sheet rocks we need, who do we need to hire, who the staff that we need, and all of that. And then I’m the guy in a suit, so to say, meeting the guy and then selling the house and all of that, yes.

Joseph Crooms (13:59)
amazing. now every operator I know has a moment when things just got real, Timothy. Maybe a deal that went sideways or a time they had to pivot fast. You mind sharing one of those moments for us?

TIM Kihiko (14:53)
Yeah, know, I mean, you know, I would say my first transaction actually, I learned that was a good, that was baptism by fire. And, you know, that was a pretty, pretty hard one. And so I went in, I had a very good contract. You know, the job was 150 grand.

Then I had a very, very good contract. Lawyers looked at it. I gave it to another lawyer, looked at it. And then, you know, you know, he said the guy give me a third of the money to get the job started. And then I gave him the third of the money and he did, you know, this much work. And then I didn’t see the guy again, you know, came to find out he did the numbers. And then he was like.

At the end of the day, there’s no money I’m going to end up making in this transaction. So I might as well get out right now. And then, so now, you know, I went in and then I had to land the job and I had to really like literally, you know, kind of manage it there. And then, you know, some of those guys that he was hiring, I went in and then I started, I said, hey, I’ll be there, but don’t worry, material is going to be there, but I’m only going to pay you at the end of the week.

And then I kind of went that way, can went that way until I found this guy where now I can trust and be sure that that one is good over there. that was kind of a challenge there. I was able to overcome it. I would say it was quite a bit.

There’s a big, big learning lesson right there.

Joseph Crooms (16:44)
Thank you for sharing with that Timothy. That’s really gonna be key knowledge that you just shared. that’s the kind of stuff people don’t talk about enough. And honestly, so what separate the folks who just dabble from the ones who stay in for the long term? You’ve been in for the long term. Let me ask you this. What are you most focused on solving or scaling next? Like this talk about that big project that you just landed with the approval of the state a little bit.

TIM Kihiko (17:11)
Yeah, so, you know, I’m in Lower Lawrence, this area, you know, like when I was starting, there were so many mills. This is where industrialization started. And then what they had is they had, you know, there were factories and stuff like that, right? Now,

The building was vacant, people were going there doing drugs, was a crime area, it was a big mess. And then this guy came in and he was like, okay,

I didn’t have the brain or the imagination to think I could be on those rooms. But now finally, after 20 years, I was able to get an old courthouse. This building was built in 1700. It’s an old building.

superior code building. And then so now I was able to learn that. So that’s just basically like, you know, me being, you know, in the business for a while now to finally get what I’ve always wanted. Now in reference, you know, if you think about buy and hold, I have about 12 unit right now. But now this is I have an opportunity to actually pocket about 20, not 20, about 97 unit.

for rental and about 40 condominiums which we will turn around and sell them.

Joseph Crooms (18:30)
Wow, that that’s big, especially since you what is your portfolio size actually right now?

TIM Kihiko (18:37)
So that is in, you know, it’s going to take some years to work on to get there because, you know, just overall everything how the whole building, the whole construction and everything goes, permitting and all of that. But it’s like, you know, yeah, this is what you’ve been working on since

let’s say 2016 on the first project and then to now, you now you got this opportunity.

tell them, okay, the most you’re gonna get here is 450. Like this is it, it’s 450, you’re gonna get 450. And then I come in and then I got him an offer for 525. So it’s just going above and beyond, above and beyond because now, you know, let’s say you’re just the seller, you don’t know.

even if you can hire somebody to do the work, you don’t know what colors should you paint on a house, how should you position the house, how should you market it. it’s like you doing what, doing above, going above and beyond kind of brings the right people on your side. And then now they can be like, okay, this is somebody I can count on.

Joseph Crooms (19:55)
Yeah, and you can’t fake that. Relationships everything in this space. All right. Before we wrap, if someone wanted to reach out to you, Timothy, connect with you, maybe collaborate or learn more about what you’re doing, what is the best way for to reach? And you can repeat it twice.

TIM Kihiko (20:10)
Alright, I think the best way to start with the easy ways, just send me a text message on my main number is 978-710-9307. Again, it’s 978-710-9307.

Joseph Crooms (20:26)
Sounds good. Perfect. Well listen, I appreciate your time, your story, your perspective, which has developed into a philosophy, which you say, you know, going the call of duty. And and I appreciate that.

So we’ll see you on the next episode. Timothy won’t you say I see you pe tell the people you see him soon.

TIM Kihiko (20:46)
See you soon. Thank you very much

Joseph Crooms (20:48)
so we’ll see you on the next episode of a Investor Fuel Real Estate Pros Podcast. I’m your host, Joseph Crooms. Have a great day.