Jim Cunningham is a successful house flipper. He buys, fixes up, and sells houses in Ewing, Trenton, Lawrence, and nearby towns. He has just written a how-to manual, “Realistic Flipping,” and maintains a website of the same name.

Cunningham’s house flipping career started with a good news, bad news phone call from his real estate agent. The year was 1982. Cunningham, a minister and a staffer with the Christian youth organization Young Life, was trying mightily to buy his first house. After a long search, he and his wife, Mary, had found a place in Pennsauken with the rock bottom price tag of $33,500. Their agent called with the bad news that, after checking every possible source, she had determined that there was no lender of any kind, anywhere, who would give them a mortgage of any sort.

“We didn’t have debt or anything,” Cunningham says. “We just didn’t have a lot of income.”

The good news was that the $33,500 house carried an assumable VA mortgage. The Cunninghams happily moved in, and Jim began to fix the place up using any materials he could scrounge up. “One night I was at a meeting at a nice house in Cherry Hill that had just had a fire,” he recounts. The family, in the midst of making repairs, had thrown the old cabinets into the garage. He saved them from the dumpster, took them home, and re-designed his kitchen around them. “It was a 1940s kitchen, and the cabinets brought it up to the 1970s,” he says. He didn’t have enough money for a plumber or an electrician, so he did all of the work on the kitchen, and on the rest of the house, himself.

“We turned it the house over in 18 months for $58,000,” he says.

Then it was on to Cherry Hill, where he and his wife bought “the smallest house in a nice neighborhood.” He tore the second story off, added bedrooms, a sitting room, and a bathroom. “I increased the floor space by 1,200-square-feet,” he says. He did all of the work himself, made a tidy profit. Then, 10 years ago, he bought a rental property in West Windsor from a guy he knew who had “taken a bad property and made it worse.” He fixed the place up, rented it for a while, and then sold it “for a ridiculous amount of money.”

It was then that he began to realize that “maybe it’s not just my own home. Maybe I could do this.” Maybe he could fix up houses as a business, that is.

At about the same time, his best friend, Craig Welch, an Internet entrepreneur whom he had met through Young Life, bought a foreclosure in Ewing. “It was in a good neighborhood, but it was a total disaster,” says Cunningham. “It had been rented to college kids. The carpets were soaked in beer, there were insects, rodents.” He helped Welch to gut and remodel the house, and he saw his friend “make a great profit.”

The two helped each other on projects, and three or four years ago incorporated their flipping business, while still spending most of their time on their primary careers. They work with a real estate agent who is charged with finding “ugly duckling” houses, that is houses with hideous exteriors, messy interiors, but sound cores. To be good flip candidates, these houses have to be priced below the value other houses in the neighborhood. They then buy the houses — working on one or two during any time period — and whip them into shape over a period of about four months before selling them.

In nearly every case they have to replace electric boxes and heating systems. They generally paint the houses inside and out and put in new kitchens and bathrooms. “We use subs for the low end and the high end jobs,” says Cunningham. At the low end, he and Welch have found that it is not worth their time to cut overgrown brush or break up cracked sidewalks. They generally outsource those jobs to neighborhood youths. On the high end, they leave big plumbing and electrical jobs to professionals with whom they have ongoing relationships. In exchange for a steady stream of work, these men offer them good prices. “We don’t even bid the jobs,” says Cunningham. They also use a painter who will do all exterior and interior work for $3,500.

The pair recently flipped an ugly duckling in Trenton. “It was a complete disaster of a house,” says Cunningham. The paint was peeling, the yard was full of rubble, the back porch had fallen off. They bought low and spent a couple of months fixing it up, work they detail in their book, in which they call the house “Cedar.” Their real estate agent suggested that they sell Cedar for between $165,000 and $169,000.

“We said no, $189,000,” recalls Cunningham, laughing as he adds, “she was furious. She said it would never appraise. She said no house in the neighborhood had ever sold for $189,000.” But, as it turns out, a woman down the block had been watching the house’s transformation, wanted to buy it, and paid $189,000 cash.

Going in, says Cunningham, he and his partner had thought that they would each make between $5,000 and $8,000 on the project. “For a few months work, that would have been ridiculous money,” he says. But in the end they each made four to five times that amount.

That, of course, was in a time of rapid appreciation. Yes, things have slowed down, Cunningham admits, but he thinks that here is still money to be made in “realistic” flipping. Houses are selling for less, but it is also possible to buy them for less. He says that, on his many supply runs to Home Depot, he still bumps into many people who are flipping full time. But the people who were all set to quit their day jobs to devote themselves to making a quick buck are now nowhere to be seen.

Still, an interest in flipping remains, and Cunningham and his partner are starting an adjunct business around it. Rather than sell their book in stores, they are distributing it only from their website, and only as part of a package. “Realistic Flipping” costs $99 and includes one year of advice from the pair. The advice comes via an online forum. People who have paid for the book can ask as many questions as they like. Cunningham, who did most of the writing in the book, responds to forum questions nearly every day. He admits that many of the questions involve material that is in the book, but in other cases, he says that he spends considerable time on new topics.

“A woman just posted a question asking what tools she should buy,” he says. “I practically wrote a whole new chapter telling her what to buy, and when, and what not to buy.”

He thinks that $99 is a fair price for the book and forum combo. The book, which is printed on thick, glossy paper, and which contains a number of color photos, costs $40 to print. He says that it is possible that he may try to find a way to get print costs down in future editions, perhaps by grouping all of the color photos in the middle of the book rather than spreading them throughout. As for the forum portion of the deal, he says that the price could go down if it becomes more of a person-to-person advice source and if he is able to spend less time on it.

“Realistic Flipping” is well-written, beautifully laid out, and chock-full of information — some of it common sense, but lots of it the hard-earned wisdom of people who have been there and flipped that.

It talks about how to spot houses to bid for, and houses to run from. It gives a detailed list of essential fixes. This section is so good that it could also be a big help to people who are getting ready to sell their own houses. The book states for example, that “We are always careful to budget time and money for some little things. We always replace the mailbox and the numbers on the house with new ones that match the style of the house. We also budget for a new doorbell and new storm doors where needed. These are relatively inexpensive, but are things that people notice first when they walk in.”

On the other end of the scale, the book warns of big money traps. “While you are looking at the roof, also be sure to notice the condition of the chimney,” it urges. “If bricks are missing or it’s leaning like the Tower of Pisa, you will need to spend a pile of money. It is not unusual to spend $12,000 to $20,000 if a chimney needs to be totally rebuilt.”

The book covers financing, permits, working with contractors, pricing, and how to decide what to renovate. It also gives ballpark figures for a score or more of common remodeling costs — $1,000 for trim and doors, $2,500 to $3,500 for windows, $500 to $2,000 for landscaping, and so on.

When he was starting out, Cunningham kept these costs to a minimum by doing the work himself. The son of an FBI agent and a homemaker, neither of whom was particularly handy, he says that he is a natural born rehabber. “When I was a kid I used to take my bike apart just to see how everything worked,” he says. “I just like to fix things.”

He studied law enforcement at the University of Maryland (Class of 1978), but went straight into a career in the religious ministry with Young Life, where he is now regional director for New Jersey. An ordained minister in the Presbyterian Church of America, he has been interim pastor at the Hope Church on Denow Road in Lawrence for 18 months, and previously was with Princeton Presbyterian Church. He and his wife, whom he describes as a “domestic engineer,” have three daughters, age 21, 18, and 14.

His salary has never been high, and the money from flipping houses is a big help with his children’s tuition. “You see guys on the Internet who say they make six-figures every year flipping,” he says. “I’ll never make that much money. I don’t even want to make that much money.”

“Realistic Flipping,” he says, is for people like him, who want to take reasonable risks on real estate, and make some money while they are doing it. As the book says that “Over the course of a few years you can expect to earn a substantial amount of money if you are prudent, work hard, and follow our program. Fair enough?”

Realistic Flipping/C&W Renovations, 1821 Pennington Road (Route 31), Ewing 08618. Jim Cunningham. 609-915-2988; fax, 609-406-0943. E-mail:jim@realisticflipping.com. Home page: www.realisticflipping.com

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