Lucky to be a Millionaire - How to Flip a House and Survive a Recession

What role does LUCK play in business?

Usually on this show we feature a challenge. A mountain of debt – or a marketing problem – something that the business owner has overcome, that we can learn from.

However, our guest on the show this week has catapulted herself from an impoverished refugee family, to earning millions as one of the top real estate producers in the Bay Area. And to hear her tell it... it’s been no sweat.

You know I am lucky. I know a lot of real estate agents work really hard. I work really hard too but I feel like I have more luck.

-Trang Dunlap

Now, the real estate business is hard. It is dog eat dog with a smile.

Everyone knows there is a lot of money in the business. So everyone wants to be in it – probably even you. Whether that means saving up to own a home, flipping a property, or actually becoming a real estate agent.

But how many people actually make money at these things?

The average California real estate agent earns less than $40,000 in their first year of business. It can take years to improve. And even that isn’t a great statistic because the average and the median can be signicantly different. The top performers, like Trang, pull averages up by tens of thousands of dollars.

Trang is in the top 5-10% of real estate agents in the Bay Area, selling over $50m worth of property per year. And as everyone knows, real estate agents get paid on commission.

On the show today we learn from her up close and personal about how she goes about flipping a house. And how she survived the worst real estate market in US history - by becoming a master of the short sale.

We also created this free primer here on our website:

Trang's Advice on Flipping Houses

So is it luck? Or is Trang just one of the toughest women in the business? You be the judge.


Trang came over at the age of 10 from Vietnam. Her dad was one of the 'boat people'.

Estimates of the number of Vietnamese boat people who died at sea can only be guessed. According to the United Nations High Commission for Refugees, between 200,000 and 400,000 boat people died at sea.

She was always driven to succeed. She got a scholarship to Parsons School of Design in NY - the #1 school for Fashion Design in the US ... but her family's poverty forced her to drop out and move back home.

After several jobs where she explored different paths, Trang’s future husband Matt pushed her to get her license and together they joined the real estate firm Keller Williams.

Flipping Houses

So how much should you expect to make on a flip?

I know everyone wants 10% net return, but nowadays it’s really hard to make 10% net return.

- Trang Dunlap

10 percent net return would be profit beyond the cost of the home, and all of the other costs. You have to think of closing costs for the brokers and title company. Carrying costs - which are the costs you have to carry during the short time you own the home - like utilities and insurance. Unless you’ve paid all cash you have financing charges. And finally you have to pay capital gains tax on your earnings.

Also, the market can change on you during the months that you’re working on the house.

So when it comes down to making money, flipping homes is all about speed.

Trang and Matt have worked out a simple formula for assessing whether or not a flip project is worth it for them. They aim to earn $20-30k for a month’s work. That would be a risky opportunity in a hot market with minimal repair work. If you think about that in a net profit way, if the property is over a million dollars, that would be 2-3%. So, the time they hold the property is low, the profit margin is low, but the cash flow is really good.

Other times they will take on a more significant construction project that may last 6 months. In that case, they would look to earn closer to $100k. That is a decline in monthly revenue, but an increase in profit margin. Make sense?

The main thing is not to be greedy … and like she said, especially at first, be prepared to break even.

You can find more information in our free guide:

Trang's Advice on Flipping Houses


In the show Trang said she was "lucky" to produce 10 transactions in her first year.

I kept trying to ask Trang about times when her “lucky” streak wore out. When she might have gotten stuck in a transaction – or for example the fact that she was starting her career in the biggest real estate crash in US history. Wasn't that unlucky?

Luckily, I had a client who needed to short sell in 2007 - so I learned about it. I was one of the first ones to know about short sales, even before the banks really knew about it.

- Trang

There - you hear it again. She said she was lucky.

Trang had completed one short sale before the market crash. I hardly think that made her an expert. But in her mind, she had experience. She quickly interpreted the situation the market was in and within months had turned her new business away from regular transactions and into short sale transactions.

You’ve probably at some point or another heard the phrase “Luck is what happens when preparation meets opportunity”.

Back then nobody, even the bank didn't know about short sales. So they didn’t really have a procedure for it. They would just ask for the appraisal and approve you over the phone. So because I knew about short sales, when the market turned I was able to turn my normal business of selling houses, into short sale transactions.

- Trang

Concrete Lessons

Here are a few of the concrete lessons that I think we have learned from Trang:

First of all, setting goals while maintaining flexibility. Trang wanted to be a fashion designer. She pursued it full force. It wasn’t easy to give up on that dream. But when she realized it wasn’t going to pan out for her, she was able to move on.

My guess is that if real estate hadn’t worked out, she would have moved on again from that and we would still be interviewing her about something else!

This is what people mean when they say you make your own luck.

The next thing is discipline.

In my experience, most of the time someone is pursuing a hot stock tip, a can’t fail real estate investment, or creating yet another internet app … they’re chasing a dream and are under-educated and under-prepared. They don’t really have passion for what they’re doing - they’re just hoping to make money. That is when your fate truly rests in the hands of luck.

Trang is a disciplined investor who doesn’t over-extend. When she could finally make good on her childhood dream of taking care of her parents, she bought them a house – in cash.

The home she lives in now – which, by the way, is literally inside a golf course overlooking a city called Pleasanton, CA – she bought the lot at a bargain and built it with cash.

They only do one flip house per year, and they finance it themselves.

I think it’s important to walk away from this show realizing that of course, there is a lot of money in real estate. But don’t underestimate the level of education and preparation that Trang undertook before being presented with her opportunities. And she is always financially prepared to break even on each investment. She doesn’t count the chickens before they’ve hatched.

That being said – if you want to flip a house and you’ve got the passion and drive – I say go for it! It can be a very rewarding enterprise.

Don’t forget to check out our free primer on Trang’s advice on house flipping!

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