How to Flip Distressed Houses Without Losing Money | Phoenix Real Estate Investing

Justine Ramos (00:00)
Like I’m running my numbers low. And right now I think my success rate, like my offer to offer accepted rate, is like one out of twenty because I am so low and so conservative. Cause in this market you have to be. Like this is a market where you can lose your money in real estate so quick. Flipping profits are at an all time low, like compared to what they were, in the last two decades. I think one out of five flips lose money. And I’ve in being a wholesaler and working with dozens and dozens of clients, I’ve seen people lose money.

Dylan Silver (02:02)
Hey folks, welcome back to the show. Today we’re joined by Justine Ramos, better known as That Flipping Agent. She’s a Phoenix-based investor, agent, and wholesaler. Justine, thanks for joining us here today.

Justine Ramos (02:15)
Thank you for having me. Excited to be here.

Dylan Silver (02:17)
Great to have you on. What types of deals are coming across your desk these days?

Justine Ramos (02:23)
Distressed single family homes in Phoenix.

Dylan Silver (02:27)
That’s a area that I cut my teeth in. I can certainly talk a lot about that. When we talk about the distress space, there’s many kinds of distress from the home being physically distressed to the sellers going through, you know, death, divorce, and any number of different scenarios. And then you have tired landlords and high days on market. Is there one specific niche that you see more often?

Justine Ramos (02:54)
I would say definitely like physically distressed. Like the property has, you know, might be all original from the 70s, hadn’t been maintained, maybe it’s been abandoned for years. But with that, I do think comes a lot of distressed sellers as well. It could be a probate. I see a lot of probate things. I see a lot of so inherited properties where the kids are out of state. That happens a lot. Yeah. I see people aging out of their homes a lot too, like with the at least with the age of the homes that I work at. A lot of the ones like the property I’m working on right now is a nineteen fifty five build, my current project that I’m rehabbing. And original owner when we bought it. That’s like seventy years. No

Dylan Silver (03:36)
Good. When we talk about rehabbing these properties, especially a home that’s, you know, nineteen fifty, gosh, that’s that’s gonna be, you know, seventy years old, right? When we look at that, are there any special considerations that you will take a look at before getting it under contract or before looking at it as a flip for yourself?

Justine Ramos (03:58)
Yeah, I mean you gotta do you have to do all the due diligence. And a lot of times these properties come with no information. Like we don’t know how old the major systems are. Cause the first thing you’re gonna look at is how much money is it gonna cost me to flip this, to fix it, to get it livable again. So you’re looking at the major systems like the pipes, the electrical, the roof, the HVAC, the windows. Windows are huge in Phoenix because you know the the old houses have those single pane and you really have to have the double pane windows now. So you’re looking at all the expensive things and a lot of times the houses have no information on them because it is a probate property, though the seller has passed away. And so you really have a lot of unknowns. And in this current market, you kind of always have to assume the worst when you don’t know something. Yeah. So you have to assume it’s gonna be bad. You have to assume the pipes are gonna be bad. You have to assume the electric’s gonna be bad, especially because in Phoenix, it’s such a competitive market. A lot of buyers are completely waiving inspection periods. So you’re going hard on your money when you’re locking up these properties and taking a big risk. So you really have to try to do all the due diligence up front and assume the worst for your budget.

Dylan Silver (05:05)
Yeah. You mentioned having a little bit of you know wiggle room, assuming the the worst. Let’s get a little bit granular here if we can. If in a nineteen fifties home there’s gonna need to be some major updates in many cases, you’re gonna be looking at potentially electrical, you know, certain types of materials that may be in the home that may need to be replaced or repaired. And then you’ve got all the things that you might need on a a newer home, right? Foundation, roof, kitchen, bathrooms, et cetera. When you’re looking at a nineteen fifty build is this something where you’ll budget for all of that ahead of time, or will you send a contractor in there and say, hey, tell me what you think this looks like?

Justine Ramos (06:31)
If I’m gonna go hard on my money, I’m gonna try to walk the property with a contractor. Now I have gone hard on my money and not walked properties with contractors, and thankfully it worked out. But like you really like, I mean, I’m I’m always trying to way overestimate the budget. And at this, I’m not a contractor, but I’ve walked enough properties with contractors at this point where I’m usually pretty spot on with my number estimates on how much it’s gonna cost. And in Phoenix, usually if you’re buying a property that needs everything, it’ll you might spend around a hundred thousand dollars. Another and another big thing in Phoenix, especially if it has a pool. So another big thing in Phoenix is there’s swimming pools in a lot of houses. And when properties start to go distressed, when sellers start to not be able to afford or handle the maintenance, the swimming pool is usually the first to go. Like they’ll just drain it and it’ll just sit empty. But The if a ha if a pool’s been sitting empty for years, it’s gonna be cracked. I the house I’m working on right now has a swimming pool, so the cement’s all cracked, so it has to be like totally rechipped out, replastered, and that’s gonna be fifteen grand.

Dylan Silver (07:36)
Yeah, I mean this is an interesting case because this is a property where it’s got a pool in it. So that one point in time it was a mark of, you know, success. And now here we know it’s heavily distressed. When you’re looking at acquisitions, you know, the saying is you make the money on the buy. Do you try to get these properties at in a point where, you know, whether or not the market is at a place where you want it to be, whether it’s high or l or low days on market, that it’s all gonna work out because that initial acquisitions price i i is well below what it would be had it, you know, stayed on market and been marketed with a realtor, et cetera.

Justine Ramos (08:14)
Wait, Carrie, can you rephrase that question?

Dylan Silver (08:16)
Sure, that was kind of long winded. Basically you you know, when when you’re looking for acquisitions, right, are you trying to get it a p a certain percentage below, you know, the market or MLS value if it was to stay on market for a long period of time?

Justine Ramos (08:31)
Definitely, definitely. Like I’m running my numbers low. And right now I think my success rate, like my offer to offer accepted rate, is like one out of twenty because I am so low and so conservative. Cause in this market you have to be. Like this is a market where you can lose your money in real estate so quick. Flipping profits are at an all time low, like compared to what they were, you know, in the last two decades. I think one out of five flips lose money. And I’ve in being a wholesaler and working with dozens and dozens of clients, I’ve seen people lose money. Yeah. And on deals that I ran and sold them, and I then the numbers work and you know d little decisions happen. But yeah, you have to buy super deep. And usually like in my market, how I run my numbers is as a flipper, I’m looking at comps and I’m looking okay, what has sold that’s been flipped in that neighborhood in the last six months. And so the and then I with that I get the after repair value estimate of what I’m shooting for. And then usually my formula, and it depends on the neighborhood, is I’m gonna run that at around 75%. I’m gonna take the after repair value, multiply it by about by 75%, and then subtract the rehab costs. So if I think it’s gonna be a five hundred thousand dollar after repair value, I’d multiply that by point seven seventy five percent and if it had the hundred thousand dollar rehab I would then subtract that from that number and that’s usually my pickup price formula.

Dylan Silver (09:58)
Seventy five percent of ARV minus repairs, right? Seventy five

Justine Ramos (10:01)
Yeah, ARV minus repairs.

Dylan Silver (10:03)
Now now when we talk about the transition from strictly wholesale to then a realtor, this is a transition that I’ve made myself. And I know for me it was because I saw so much new construction happening in Texas and I’m like, well, I don’t really know how to at that point in time wholesale to developers. I wasn’t into land wholesaling. So how do I start working with developers? Well, I gotta get a real estate license. At what point did you decide to to make the jump and become a realtor?

Justine Ramos (11:07)
Yeah, so I quit my corporate job, my comfortable corporate job, summer of 2023. I just had a mental breakdown and I took a leave of absence and I never went back. And in that leave of absence, I was like, ‘Cause I’d always been interested in real estate. I had bought rental properties when I still worked in corporate America. So I’d all and I was like trying to interview with other companies and I was just not excited about it. And I was like, what’s the one thing I love? To talk about. What’s the one thing I want to master? And it was real estate investing. So I got my real estate license. And actually I went so I got my real estate license before I wholesaled. And then I signed with a brokerage. And the brokerage that I started with was it’s one of the biggest wholesale brokerages in the country. And but they strictly do wholesale. We couldn’t do anything else. I couldn’t I couldn’t do anything else with my license. I couldn’t even represent myself to buy a house if I wanted to, even though I was a licensed realtor because That brokerage was that strict, but they they mastered the wholesaling. Like so, and they had an incredible training program. So it was truly an amazing place to start my career. Like within two years, I had sold, I think, 54 houses or the year and a half I worked for them. Yeah, because they they were so, I mean, they took all my money, you know, they took all my commission, but I learned so much and I was able to do so much volume because they really taught you everything and it was so specialized. But it got to the point, especially because the wholesaling market in Phoenix isn’t that great right now because it is so oversaturated and competitive and so hard to find deals. But it got to the point where I was like, okay, I have mastered this wholesaling. And again, they were taking away almost all of my commission checks. So I really wasn’t making that much money for how much work I was doing and and the success I had. And I was starting to get inquiries from people wanting me to list their house and do this and that. And I was like, you know what? I’m ready. I’m ready to be independent. I’m ready to kind of break away and do my own thing. So I left that brokerage and joined my current brokerage last October. So almost a year ago now. And since then I’ve really I’ve just been doing a little bit of wholesaling still. And now I’ve been really building my retail business and being able to represent retail clients. And you know, it’s it’s been awesome. It was really starting it was holding me back and There was a lot of red tape. So now I feel like I have the freedom to like create the business I want. I should have been riding for That Flipping Agent from day one, but you know, I was riding for that first brokerage. Now

Dylan Silver (13:36)
When we talk about going from strictly wholesale to then the retail side and representing buyers and and sellers, what was maybe the biggest tr transition or learning curve along the way?

Justine Ramos (13:51)
My gosh, there’s so much. I think the biggest thing, and this might sound crazy. Before I’d only worked with investors and it was whole these wholesale off market properties for the most part. And so there was no emotion at all. It’s strictly numbers. It’s strictly numbers. I wasn’t representing clients. So they weren’t projecting their stresses onto me. And it was strictly numbers. I mean, as investors, either it pencils or it doesn’t. If it pencils, let’s talk. If it doesn’t pencil, you know, see you next week. So it’s like, and so switching to the retail side. One, it’s much slower. I’m used to the fast pace, you know, these investment properties, these wholesale deals move so quick. And retail is much, much slower, and it’s much more emotional, much more less logical based and more emotional based. And I’m representing people now. So I truly have to have their best interests in mind and I I take that deeply to heart. But it’s a complete different style of communication. And a completely different game. Honestly, it’s a completely different game. It’s much more emotional, much more slow, much more nurturing, much more, you know, they look for me to be the expert versus the investors. They’re they’re the experts, right? So that was the biggest transition for me and something I’m still learning because everyone is so different. But much more emotional and less fast paced and rough around the edges communication.

Dylan Silver (15:14)
You know, that’s a great Point. People often talk about it being challenging to work with investors. But if you’ve mastered the retail side and then you’re starting to work with investors, I can see that being challenging. But folks who have specifically worked exclusively with investors and then are starting to to work with residential buyers and sellers, this is something that was difficult for me. I realized this whole lingo that I learned with investors isn’t super applicable right now. And I have to be a really almost I would say strategic a a and like a ninja almost in the way that you follow up, right? ‘Cause you don’t wanna bombard people. At the same point in time you wanna have them, you know, yourself immediately come to mind when they’re thinking about making a move.

Justine Ramos (16:43)
Yeah, yeah. And I had I realized ’cause I was talking to my retail clients the way that I spoke to my investors and it wasn’t resonating well. And it’s because, you know, investors that so rough around the edges of rut. We’re always we’re always, you know, trying to get a deal and we don’t care, whatever. And then it that no, like it it’s it’s completely different way of working with people.

Dylan Silver (17:07)
Let’s get a little bit granular here if we can. I’d like to talk about what the market is like in in Phoenix and then also what you’re seeing as a whole. I know you’ve got rental properties in other states as well, and I’m licensed in a neighboring state, Texas, so there may be some some similarities here. When you’re working with buyers, especially newer buyers, or folks who may be first time buyers or first time buying on on their own, what do these conversations look like? Are there a lot of folks now looking at new construction? In the Phoenix area, what’s the the landscape like?

Justine Ramos (17:39)
New c so I’m in Phoenix proper. And as far as new construction goes, in like Phoenix and Scottsdale, there’s not a lot. But when you go like maybe maybe in North Scottsdale or around the edges of the valley, that’s because Phoenix is so established and so on top of each other with older homes centrally. There’s a lot more new builds on the outskirts. So I haven’t actually done much with new builds because investors aren’t really into it. I have one buyer right now where we’re gonna go explore some new build communities in Queen Creek. But most of the homes that I work with are gonna be from the 80s or older.

Dylan Silver (18:16)
Okay. As far as purchase price, can you give us a a range of what this looks like in Phoenix proper?

Justine Ramos (18:23)
Yeah, I think the average purchase price right now is around four hundred to five hundred thousand dollars. And that kind of makes sense because that’s kind of I would say the point, at least in my opinion, where the rent I call it like the rent break even point. Like what does rent get you versus buying a house? And that’s kind of the point where Renting makes more financial sense sometimes than like the price wise. Like I’ve had multiple buyers this year. I mean, it’s been a tough market. I’ve had multiple buyers this year change their mind and renew their their rental lease. And I don’t blame them after we search for months. My cancellation rate this year, I would say, is probably around 50%, both buyers and sellers. Like sellers getting frustrated, me telling them that we need price reduction, then you know, wanting to list with another agent. Expired. I’ve had one that needed to go to short sale and I don’t do short sales. So I had to refer that out to a short sale specialist after we had it listed for several months. And then yeah, buyers just deciding to renew their lease.

Dylan Silver (19:24)
You gotta be tough. I mean just that that level that you told me, I know that that you gotta be very tough. As a wholesaler and someone who cut their teeth in wholesale, I know that you’ve seen everything, right? And I’m sure we can talk about, you know, basically being like family triage coordinators where you’re bringing, you know, people who haven’t spoken in years together and the home may be in shambles and then they say, Well, I wasn’t real realizing that you were gonna sell the home, but now that you are, I want a piece of it. But now you go from that to a totally different conversation about expectations And someone is wanting more than they can probably get from the market, but then sometimes we still put it out there for that much because you know, we w we want to to to earn their trust in their business. These are challenging conversations. Now, when folks in Phoenix specifically are looking at you mentioned the outskirts and then Phoenix proper, is there any sentiment that, you know, hey, maybe we should they’ll be living in these more cost effective areas where maybe either newer builds or new builds and there might be a commute but we can get a home for for seventy five percent of what it isn’t gonna be in Phoenix proper.

Justine Ramos (20:32)
For me, I haven’t had too much of those conversations yet, besides my current buyer that we’re gonna be looking at some new build communities in Queen Creek, because that’s where she wants to live. And there’s some great new build communities there. Most of the buyers that I’ve worked with have been really picky on location. Like I either want it in these, you know, five square miles or I don’t want it at all. That’s the that’s a lot of convos I’ve had. And then again, most times they’ve been in like central Phoenix. So I haven’t really haven’t had too many with new builds. I did have the one that I had to re the listing I had that I had to refer out to short sale. That one was out in Buckeye, which is w an area with a t like everywhere you look, there’s like five signs on the street corner for those new build communities and come tour open houses. So that one was a 2023 D.R. Horton home in a D.R. Horton community. And I couldn’t sell it. I mean, and it was because they had put, you know, those new build communities you put such a small down payment on. So we didn’t And it’s been kind of a sliding market. Yeah. And so they did a very small down payment in a sliding market. And then there was like four neighborhoods across the street offering three point nine nine percent interest rate to pick your own new build. And and so that was that’s the one that I had to refer off to short sell because of the competition with those new build communities. We just couldn’t compete.

Dylan Silver (21:52)
I should know this, but how far is Scottsdale from Phoenix?

Justine Ramos (21:57)
Scottsdale and Phoenix are like I mean, so Scot Scottsdale and Phoenix are both super, super long and skinny. They’re both like twenty, thirty miles long, but and they’re right next they they they’re long and skinny next to each other. So like with the part of Phoenix that I’m in, it’s like North Phoenix, but I’m like eight minutes until I’m into Scottsdale city limits. I’m like right on the edge. But they’re both massive. And they’re close. They’re really close, I guess, is your answer. Well we’ll buy

Dylan Silver (22:20)
Look at e either both of them or maybe open to both of them or is it like hey I’m either living in Scottsdale or I’m living in Phoenix? Is there a d a cultural difference? What’s that like?

Justine Ramos (22:30)
Yeah, no, definitely, definitely. And because Scottsdale’s so huge, like South Scottsdale is the party Old Town that you see on social media and all the bachelorette parties. And then the more north you get, the more like nicer and quieter it gets. But there’s definitely like and Phoenix is so massive, so there are some areas that feel completely different than other areas. Like the part of Phoenix that I’m in is like it’s called the Sheaborhood. I love the Sheaborhood, by the way. I think it’s amazing, but it’s very like Scottsdale feel. And and again, we’re right next to Scottsdale. So yeah, no, it’s there’ll definitely be buyers where there’s like a few different pockets that they might like and it doesn’t necessarily have to be Phoenix or Scottsdale.

Dylan Silver (23:12)
Let’s pivot a bit here, Justine, and let’s talk about, you know, branding. You’ve got That Flipping Agent, you’ve got the beautiful pink sign behind ya. Of course you started working with investors. So when did That Flipping Agent come about as a brand?

Justine Ramos (23:28)
It came about when I changed my social media name. I think I have started out my career as like Selling Scottsdale Realtor. And I was like, wait, like all I’m selling these crazy houses that have crazy stories. I’m selling crazy stories on the internet. Like I’m not that polished Scottsdale Realtor on social media at all. I’m showing the bad, the good, the ugly of being an investor and in the nitty-gritty. So I just kind of was like, like. That Flipping Agent, it just like stuck when I finally thought of it as a social media name. Cause I was like, my God, it’s a perfect play on words. Like that, you know, effing agent, That Flipping Agent, I’m flipping houses. I work with clients that flip houses. It’s catchy, it’s memorable. So that became my social media. And then, but then I was working with that one brokerage. And so that brokerage I started with. I didn’t have any confidence as a new realtor or a new wholesaler or being new in the industry at all. So I wasn’t branding myself. That was my biggest mistake. Like I should have been using my own email. I should have been branding myself in the beginning besides just having it be a social media name. But I was branding everything with that brokerage and promoting that brokerage because they had a big name. And so once I left that brokerage last year, I decided like, my gosh, I I lost all my contacts. All my contacts didn’t have my new email. And I was like, I am never like I need to brand myself and so I just kind of gone all in and you know, I’ve been able to grow my social media and I’m actually working on getting it trademarked right now. So

Dylan Silver (24:56)
That’s a brilliant thing. By the way, I I was thinking in my head as you were talking, why did you go with that instead of the, right? But then I’m thinking, well, if I’m talking to someone and they’re like, Hey, do you know th you know, who is that that realtor? And I’ll like, you know, That Flipping Agent. They’ll like, Yeah, who is it? That Flipping Agent. You that’s her what sh that’s what she goes by. Who is it? I’ll I’ll find her on Instagram for ya.

Justine Ramos (25:18)
That’s so funny that you said that because I went back and forth between that and the, and I liked that more. And I thought it was more of a play on words too, because like that effing agent, like, she’s so annoying, or I have to see her all the time. That that that freaking agent. And so, yeah, I don’t know. I just like it just kind of stuck. And when I was like, and I will say there was a time when I did leave my brokerage and I was starting to do more retail, and I was like, Do I need to rebrand? Do I need a new name? Is this too investor? Is this gonna turn off people? And I was like, no, you gotta lean into it, do neon pink, like go with the name. It’s it’s it’ll it’ll repel some people, but it’ll bring the people that are meant to work with you to you.

Dylan Silver (25:58)
Yeah. Walking billboard, right? I have

Justine Ramos (26:01)
And it’s super searchable too. That’s another good thing. Like SEO, search engine optimization. Like if someone’s looking for an agent that does flips, like this will pop up right away. My my branding.

Dylan Silver (26:12)
Hey, just search That Flipping Agent. Yeah, who is it? Who is it? It’s That Flipping Agent. I also know that you’re you’re in the middle of really a big push, branding yourself and then I believe launching some content online. What’s that look like these days?

Justine Ramos (26:27)
Yeah, so I’ve been I started on so my goal in 2025 was to just start TikTok. And that now I’m at 30,000 followers, which is really cool. And I’ve I’m starting to learn monetization. Nothing big yet, but that’s definitely a goal of mine, you know, to build more of a media presence and learn how to monetize and collaborate and grow more. And then my goal in 2026 was literally start Instagram and start YouTube. So I really have only been on social media like really like consistently. I mean on all platforms since beginning of this year. And then and so my YouTube’s at 1.3. YouTube, I’m still the alpha, it’s much different. And then on Instagram I’m at like around, I think I’m at 6,500 followers. So nothing crazy, but like I wasn’t I was at 700 at the beginning of the year. So it’s been really cool to grow and like my media and my my presence on social media is truly to be the honest agent. Like my YouTube is like real estate for people who love to hate real estate. And you know, real estate, but I real estate, but I tell the truth. And like I do not show all the glamorous stuff that we mostly see from investors and realtors. Like I tell stories about times I’ve lost money, big risks I’ve made, risks that worked and risks that didn’t work that I took. And you know, really sharing the true, transparent side of the challenges of this industry and things that I’m learning in my own personal journey.

Dylan Silver (27:56)
You know, one of the interesting things you mentioned TikTok and starting that first, I believe, is TikTok was maybe one of the first ones where you had basically a feed that auto selected videos, right? And then I I feel like the other platforms did that over time. You know, see with YouTube, with the Shorts and Instagram with Reels and what have you. But you can open TikTok and you’ll be seeing it could be anything, right? And so it would suggest and recommend based off your previous views. But then over time you had even changes in the way people, you know, were were perceiving TikTok. I remember when I first saw TikTok, this was years ago, I was like, that’s for dances, like TikTok dances. And then now, you know, I don’t think I ever see any dances. Now for me, if I open TikTok, it’s all real estate things ’cause that’s what I’m looking at too.

Justine Ramos (28:45)
Yeah, yeah. And that’s why I actually started on TikTok because I was too scared to be on social media. Like I wanted to be on social media, but I was too scared. And so TikTok felt anon like anonymous to me. Like Instagram, Facebook, that felt like my friends and family, like just putting myself on a spotlight and I wasn’t comfortable with what they would think. Because again, I wasn’t showing the normal stuff of real estate. Like I was showing, you know, big times I’ve lost money and mistakes I’ve made and you know, hot takes and rants and opinions. And so I liked TikTok because it just felt more anonymous. And then really at the beginning of this year, I’d like, I have to get over the cringe factor. Like if I really want to brand myself and really want to like go take social media seriously, I have to stop caring about what the people I went to high school with are gonna think when they see my videos. Like it is it’s such a silly thing, but the fear will keep you from your goals.

Dylan Silver (29:33)
Yeah, no there’s no question about that. And then you think about well what are they doing? You know, that that I’m so concerned about their opinion with. And the reality too is that, you know, as as anybody who who’s a real estate operator knows you gotta have so much, you know, rejection to get to success. That that’s part of the process. And then some of it too is being professionally present online. I had someone tell me there’s a fine line between, you know, getting someone to unfollow you and then getting someone to to think about you first when they’re thinking of buying or selling their their home. We are coming up on time here though, Justine. Any new projects or activities that you’re working on? And then also anything you’d like to mention directly to our audience.

Justine Ramos (30:13)
Yeah. Wait, so okay, so projects

Dylan Silver (30:19)
Or anything at all you’d like to mention to our audience before we wrap here.

Justine Ramos (30:23)
Awesome. Well, thank you so much for having me. Definitely I want to plug some of my social media. So I’m That Flipping Agent across all channels and my DMs are always open. So you can send me a message, or my email is [email protected]. But if you are in the Phoenix area and you’re interested in investing or buying and selling a house, I would love to chat with you.

Dylan Silver (30:52)
Justine, thank you so much for your time today. Thanks for joining us.

Justine Ramos (30:55)
Thank you.