Finance Property How to make a fortune flipping houses

How to make a fortune flipping houses

"Without a shadow of a doubt, the best value for renovating your house is painting." Photo: Supplied.
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When you think of ‘house flipping’ – the new property buzzword for buying a run-down house below market price, increasing its value through renovation and then reselling it for a profit – it’s easy to write it off as just another opportunity for well-to-do property sharks to expand their wealth.

But for Bendigo’s Jennifer McDonell, an enterprising single mother of six, house-flipping wasn’t just a savvy investment strategy – it was a steady path out of poverty and a way to provide a home for her family through a lifetime of ups and downs.

In 1979, Jennifer was recently-divorced and caring for three small children. She received a parenting payment and worked occasionally at a local bed and breakfast. When she got a loan to buy an $18,000 one-bedroom house in Woodend, Victoria, even the bank manager was surprised: “The bank manager said I was the first single parent that he’d ever heard of getting a loan.”

At the time, Jennifer wasn’t looking to be a property mogul – she just needed a place to live. “I was desperate. I needed to get a house for my children. I didn’t get anything out of the [divorce] settlement … it was the cheapest house I could find.”

Climbing the ladder

Thirty-five years later – and thirty or so properties later – Jennifer runs her own business in Bendigo, Style My House, helping people prepare and present their homes for sale. And at 60, she’s still buying, renovating and selling properties too: “It’s almost an addiction now. I can’t help it. I’m always online or looking at the paper. I’ve just got to know what’s happening, what [properties] are worth. I’m looking further north right now – properties in (Victorian towns) Inglewood and Elmore are incredibly cheap.”

Jennifer renovated her first one-bedroom home with no experience under her tool belt: “I thought I’d have a go at renovating. I’d never done anything before. I bought some tiles and some glue and paint and wallpaper – and just went for it.” Renovating at home meant that she didn’t need to find money for childcare as “[renovating] was always something I could do while I was bringing up the kids.”

Jennifer sold that property two years later for $19,500, and bought a property in Kyneton for $23,500. Within two and a half years, she had renovated that house and bought a four bedroom bluestone manse for $36,000. “It was derelict. Kids had been using it as a clubhouse. Someone had kept their horse in it – it was totally trashed.”

When she wasn’t renovating, Jennifer found time to remarry and have three more children. “My [new] husband didn’t like old houses, so we sold the manse for $76,000 and built a new house for $52,000.”

In the late 1980s, her second marriage broke down and Jennifer moved to Donald, where she bought a two-storey bank for $38,000. “It was a beautiful old red brick building, very run down. It still had the banking area and a four bedroom house on the back. It was a massive project to renovate. I was also dress-making and catering at the time, so I was able to work from the property as well as look after the kids.”

In 1990, with the six children getting older, Jennifer decided to move the family back to Kyneton so they could be close to their fathers. There she paid $50,000 for a 19th century three-bedroom house made of sawmill offcuts: “It was a real mess. It was terrible.” She sold that property two years later for $73,000 and bought a four bedroom double storey home, which she duly renovated. A few more properties followed but Jennifer made sure all her new purchases were all in same region – “I realised that changing schools was hard on the kids, so I made sure I stayed around Kyneton.”

At the end of the 1990s, Jennifer met her third husband, a barrister who owned the house next door. They sold their respective homes and bought a joint property at Mt Macedon. Continuing to buy, renovate and sell, the couple moved several more times.

Don’t get married! That’s where I went wrong.

While they were renovating the homes that they were living in, the couple also bought investment properties in Queensland, which they renovated while on holidays. The couple then bought a farm at Ashmore for $590,000 and renovated that property too.

Strength in adversity

Sadly, their relationship ended in 2007 and the subsequent three-year dispute over the divorce settlement was financially devastating for Jennifer. “It got nasty and difficult. I came out of that with about $110,000.”

Moving to Bendigo, Jennifer started again, buying two shops and a house for $230,000, which she promptly renovated and sold. She then bought a four bedroom weatherboard house for $189,000, which she sold for $275,000.

She bought her current home for $200,000 – which, of course, she is in the middle of renovating.

So, with 35 years of renovating and property market experience, what advice does Jennifer have for other property traders?

“Don’t get married! That’s where I went wrong,” Jennifer laughs.

But she is very serious about keeping emotion out of your property decision making: “Don’t get too emotional about the purchase and say ‘I must have it’ and then pay too much for it”. And it’s ok to wait for a good price when you’re selling. “Don’t think, ‘this is the only person who is going to buy it, I have to take this price.’”

Jennifer is also very clear about how to deal with agents. You should never feel guilty about talking to multiple agents, and “always engage an agent who is excited about the property – not someone who just thinks they can sell it.”

When it comes time to selling, Jennifer has a sensible mantra for presenting property: “People will remember the overall impact, the feel of the property, more than whether there are scratches on the table. You can always put throws on old couches or polish up an old buffet. It’s about making the property feel very comfortable”.

So what’s next for this hard-working business woman who turned an escape from poverty into a life-long passion for property? “I’ve still got more to do. My next ambition is a television program.” Given how much Jennifer has achieved over the past 60 years, the smart money would be on her achieving this new goal too.

Jennifer (left), with her daughter and grand-daughter. Source: Supplied.
Jennifer (left), with her daughter and grand-daughter. Source: Supplied.

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