"Real Estate Rookie" tells all

Newbie home flipper and broker Alison Rogers talks about bad agents, selling schemes and why it's impossible to predict the housing market.

By Helaine Olen

Read more: Money, Life

July 27, 2007 | "There's a joke in the industry that real estate is no one's first career," writes Alison Rogers in her new memoir, "Diary of a Real Estate Rookie: My Year of Flipping, Selling, and Rebuilding -- and What I Learned (The Hard Way!)." "It's always something people come to by default, seeking money."

Rogers is no exception. A seasoned business journalist and a founding editor of the New York Post's real estate supplement, she quit her job after a promised raise failed to materialize, and went off to seek her fortune as a home flipper in New Jersey. That she didn't live in the Garden State, and had yet to learn how to drive the car she would need to use to view a potential purchase, didn't deter her. After all, home prices in Newark were increasing by more than 30 percent year over year. How could a girl miss?

Needless to say, things didn't go according to plan. Rogers discovered that finding a suitable home, performing some quick and none-too-expensive renovations, and selling the home for a profit were a lot harder than they look on TV shows like "Property Ladder" and "Flip This House." Soon she turned to brokering in Manhattan to pay the bills -- and though she met with some success -- the big payday she'd dreamed of still eluded her.

Earning a decent paycheck from real estate has never been easy, despite the gold rush mentality that has prevailed over the past decade. According to the National Association of Realtors, agents with two or less years of experience can expect to earn around $12,000 annually. In one semihilarious, semi-heartbreaking instance, Rogers lost a $65,000 commission on a multimillion-dollar Tribeca condo ("The kitchen alone, with its Bulthaup cabinetry and pietra del Cardoso stone, was probably worth six figures") when, after negotiating a contract with the seller, her clients failed to wire the down payment money and vanished without an explanation.

Yet Rogers keeps her sense of humor and remains a true believer, sprinkling her memoir with witty and pithy tips on everything from how to make a successful lowball bid on a home to how to chat with a real estate agent. Nothing, it seems, will deter her -- not even the current real estate market, with its rising mortgage rates and falling sales numbers. After all, insiders may be comparing the conditions of the current national real estate market with the Great Depression, but figures released this week also demonstrate continuing price increases in the New York City co-op and condo markets.

Rogers met with Salon in New York, where she discussed how the home-buying business favors brokers who offer bad service and why we should be wary of anyone who says he or she can predict where the market is headed.

Why are we so fascinated with real estate?

It's a sport. It's like a way of watching baseball where we can see the standings. It's voyeurism and gossip and social standing and architecture and beauty.

What made you think you could become a successful home flipper?

I'd lived in New York City since 1988 and I had bought a succession of apartments. And like many, many other people who rode the real estate bull market, I made a lot of money. And I thought I made a lot of money not because I was lucky but because I was a genius. That's a very common bull market mistake. You do a couple of successful deals and you're like, "It must be me."

And I saw all these people walking through the Post offices making all this money. And then I found partners in New Jersey I thought I could work with. In my naiveté I didn't understand the extent to which I was looking for a needle in a haystack. If I had been willing to do this with my own capital and I could have taken lower returns, I could have done it. But I was looking for very high returns because I was trying to do this off of someone else's capital. And the very-high-return projects are indeed needles.

Why are they so hard to find?

What I find out is happening is that the contractors get to the houses before anyone else really does. Very often a contractor is called in to work on a house. The roof leaks. Or this window needs to be replaced. So they see a great deal of the community stock. And when there's something really good, they take cash out from under the mattress and they buy it.

Why do we all think flipping houses is so easy?

I think partly because it is a kind of sweat equity that we're comfortable with. You know, a lot of us sit behind desks and we don't really use our hands. And the idea of painting or repolishing a table or rubbing out some woodwork sounds a lot more reasonable than going out in the yard and building a sailboat. So it seems, if you'll pardon the pun, sort of close to home. And then we have all these people on our TV look like they're doing a wonderful job at it. There's a visual TV culture which has brought us not only the idea but this set of images that go with it.

What did you learn about real estate as a flipper that you didn't or couldn't have learned as an editor?

I had read all the books that said you need to have a cash flow and you need to have capital. But I truly, truly didn't understand that until I got into it. You need starting capital. Capital is almost everything. When I was sitting behind a desk (at the Post), the people I was interviewing made it sound easier to acquire than it actually has been.

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