Purchasing fixer-upper homes and selling them for profit (or “flipping” them) has been popularized by cable channels such as HGTV, but the reality of the practice may not be as viable as romanticized television shows suggest.
The numbers don’t always add up. At least that’s what Garrett Wells, a senior at Stevens Institute of Technology, said last week while explaining FlipTrack at Stevens’ Elevator Pitch competition.
“A lot of people see the show and think ‘Why don’t I just do that myself?’ ” Wells said. “In reality, it’s a lot more difficult when you have to crunch all these numbers and filter out the data.”
The numbers, he said, always are changing.
“If you look at housing data on Monday and the sale is on Wednesday, it won’t be correct,” Wells said, explaining how many county websites are slow to update information until minutes before an auction takes place.
That’s where FlipTrack comes in.
Wells, along with team members Bill Bonifacic, Michael Mulé and Thomas Marchese, said FlipTrack automates gathering information about foreclosed properties and streamlines it to an easily digestible web interface.
FlipTrack was one of the Top 10 finalists for Stevens’ Elevator Pitch competition, as part of its annual Innovation Expo. The expo showcased over 140 different senior design projects in various fields.
Wells was introduced to the pains of bidding on foreclosed properties through his girlfriend’s father, who took him to an auction intending to bet on over a dozen different properties. Despite extensive research, the duo arrived to the auction and discovered most of the properties they were interested in were no longer up for auction.
Wells, Bonifacic, Mulé and Marchese have FlipTrack established in Morris and Somerset counties, but the team hopes to expand throughout all of New Jersey by the end of 2017.
One of the hurdles for the project has been adapting the technology to gather information from various county websites that post information about foreclosed houses.
During the creation of the project, one county altered how new information was posted, throwing FlipTrack out of sync. The team said it planned to standardize how information is gathered, so the system can “work with or around” changing county websites designs.
The team acknowledged that FlipTrack isn’t the first service to consolidate information about foreclosures. Wells named RealtyTrac as a similar service and potential competitor, but said FlipTrack uniquely pulls information from third-party private sites such as Zillow to compile full details about properties, including the state of floors, walls, and roofs or other potential concerns.
After expanding throughout the rest of the state, the team is considering exploring parts of the country that have high foreclosure rates, including Long Island and southern Florida. The team also has received emails from interested flippers and real estate agents in California and Arizona.
Before FlipTrack can expand to other states, they creators still have some fundamentals to address.
Currently, the project exists “as a spreadsheet.” The team wants to develop a web-based portal, but expressed hesitation in showing off a working prototype before they have acquired a patent for the technology.
“It’s a double-edged sword, because the more exposure we get — it’s great for building interest, but it opens that door,” Wells said. “We want the legality issues solved as soon as possible.”
The team has raised $3,000 from a few investors, but hopes to raise additional funds for software development and patent costs. It is looking for additional investors to reach the estimated target of $8,000 to cover these costs.