Finance

‘You don’t have to be the smartest guy in the room’: A self-made real estate expert who’s increased his net worth 100 times by flipping houses explains how he does it

  • Ryan Pineda, self-made millionaire and author of “Flip Your Future,” took his future into his own hands and started flipping houses after his professional baseball career came to an end.
  • He advocates for a backwards approach to house flipping and starts with the price he can sell the property for. Then he deducts his costs and profit target until he arrives at a max-offer.
  • Pineda, who is also CEO of Las Vegas-based Homerun Offer, thinks “anyone can do this business.”
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Ryan Pineda, a self-made millionaire and author of “Flip Your Future,” never planned on flipping houses. And his journey into the business began in an unlikely place: the professional baseball field with the Oakland A’s.

“I was a late-round pick so I didn’t have a lot of money,” he said in an exclusive interview with Business Insider. “So I started working as a realtor in the off season.”

There was only one problem: He hated his career working as a licensed realtor, and was miserable. 

This led Pineda to start hustling. He began flipping things on Craigslist — couches, appliances, phones, and other miscellaneous items — to make ends meet. Interestingly enough, he soon learned he had a knack for identifying value — and he started pulling in $6,000 – $8,000 a month from his ventures. 

Shortly thereafter, when Pineda came across an advertisement for a house flipping seminar, he realized he was thinking too small — and he hit the ground running. 

“I had saved up about $10,000 from flipping couches and stuff, and luckily I was debt free from all of it,” he said. “So I was able to max out my credit cards to get a down payment for a loan.”

Pineda was able to leverage about $50,000 — money that he didn’t have — from maxing out his credit cards. 

He continued: “That’s how I bought my first flip.”

Flipping typically involves buying houses and then reselling them for a profit after market-price appreciation or renovations. While its risky, the prospects for profits have attracted even huge players like Zillow. The real estate giant jumped into the fray in 2018 and earned 52% of its revenues from its Homes segment in the third quarter. 

Pineda’s first flip in 2015 wound up netting him about $25,000 — and he was hooked. Today, he’s on pace to flip over 100 homes by the end of the year and is a newly minted millionaire. He is the CEO of Homerun Offer, a Las Vegas-based business that fields requests for cash offers from homeowners and buys their houses directly.

How to get started

“Really, it’s just a numbers game,” he said. “I’ve always been somebody who has understood value.”

For the prospective house flipper, this is one of the most important things Pineda thinks you have to understand. Value and numbers are all that matter. Don’t over complicate the process, take unnecessary risks, or stretch for deals. That’s how you get burned.

With all of that under consideration, Pineda advocates for a no-frills approach to house-flipping for those who are just getting started. 

He starts with the price he wants to sell the property for and then works backwards — deducting costs while simultaneously accounting for his profit — until he arrives at a max-offer price. 

“You just have to know what things cost — and you can learn that,” he said.

Once he arrives at a max offer figure, he sticks to it. If a deal can’t be reached, he’s onto the next one. 

“I’m not too worried about cash flow,” he said. “I’m not too worried about appreciation because I’m going to be in and out of it.”

Although Pineda has been making a killing off of house flipping, he’s quick to note that not all of his deals have been winners.

“Appreciation can hide a lot of your mistakes,” he said. 

Early on, he mistakenly loosened his buying criteria on risky properties due to the rapid appreciation that was taking place in the Las Vegas housing market. That wound up costing him — and he lost a few hundred thousand on bad deals. 

Clearly, Pineda’s strategy is not without risk, but he has learned from his mistakes and doesn’t get caught up in the emotion and excitement of the market twists and turns any longer.

“The main talent is: You have to have confidence and get over your fears because there’s not anything crazy about this business where you need super-talent to succeed,” he said. “You don’t have to be the smartest guy in the room.”

He concluded: “Anyone can do this business … just give it a shot.”

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