What Buying and Selling Millions of Dollars of Beanie Babies Taught Me About Flipping Vacant Houses

Would you believe, buying and selling Beanie Babies taught me a lot about flipping vacant houses?

I’m about to share with you exactly what buying and selling millions of dollars of Beanie Babies taught me about real estate and, I’m not kidding…I bought and sold millions of dollars in Beanie Babies between the end of 1998 and early 2001.

Listen in as I unfold my entire journey of buying and selling millions of dollars of Beanie Babies and what it taught me about flipping vacant houses!

If you’ll recall, Beanie Babies were really popular back in 1998. Collectors were grabbing them and paying top dollar. They were in short supply. It was an interesting time and I kind of tripped over the opportunity and then seized it.

Where It All Began

A little background, I was at a real estate seminar that I was teaching. This was years ago in Dallas and I was there with a couple of other people who were co-teaching with me, so I had some downtime. 

I was just walking around in the hotel and, in another meeting room, they had a Beanie Baby show going on with dozens of dealers with tables and racks behind them where they were displaying Beanies. They were all for sale and you could trade them, sell them, buy them, etc. 

I had heard a little about them and thought maybe I’d buy a couple for my not yet born daughter Nicole, in case they might be collector’s items someday. I saw a gentleman behind a table, obviously a dealer, who looked very intelligent and very well dressed. He had a gold Rolex watch on and I thought, “Man, what’s he doing here?”

I went over to him and I asked, “So, what is it about these Beanie Babies?” 

I’ll never forget. He leaned forward on the table on his knuckles and he said, “Son, you have no idea what you’re looking at.” 

He started telling me about the business and, a couple of weeks later, I went to a flea market near where we lived in Florida at the time with all kinds of stuff…new stuff, used stuff, junk, good stuff. 

There was a dealer there who had a booth and, back behind her up on a shelf, were these brown beanie bears with the Union Jack (the British flag) embroidered on their chests.

I asked the dealer, “What’s the story with those?” 

She said, “Oh, those are called Brittania and are only distributed in England, and so you can’t buy them in the stores here in the U.S.” 

I said, “Well, how much are they?” 

And she said, “$200.” 

I thought that was kind of a lot and so I went home and I started looking around on eBay, which was very new at the time, and I found that people were paying $200 and more for them there. Then I kept digging and found a dealer in England who had a dozen of these Britannia bears for sale for $1,200 (so, one hundred dollars each.) 

To me, that was a lot of money to send to England to a complete stranger. So, I reached out and we talked a little by email and on the phone until I got comfortable.

I sent him the money using Paypal, also very new at the time, and he sent me the 12 bears. I then turned around and listed them one at a time on eBay and they sold like hot cakes. I was getting $225, $250, even as much as $300 on occasion. I thought, oh my gosh, I have discovered something here! 

I went back to my new dealer friend in England and I bought a case (108) of them and continued selling them one at a time because the demand was there and people were bidding them up.

Then, the guy in England called me and he said, “Hey, there’s some Beanies that are distributed only in the U.S. that I would like to sell here. Could you go and find them for me? Here’s what they’re named and here’s what I can pay for them.” 

So, I looked and looked, created some relationships and eventually found my way into an online national U.S. network of beanie dealers. The platform was called SportsNet.

We Have Lift Off

Eventually, it made sense for me to actually go to England and meet this guy and some other dealers that I had gotten friendly with.

This turned out to be a very good thing to do because most people won’t travel and do the work. I was willing to. I learned from my dad a long time ago that business is all about relationships and the importance of getting face to face. You can’t beat it. 

So, I booked an airline ticket and a hotel, and went to England. I met all these dealers, really strengthened those bonds and started buying and selling literally thousands of beanies.

The Beanie Baby Jackpot

Ty Warner was the man who owned the company Ty. They’re still in existence and still make Beanie Babies today. 

He had a huge ego and when they finally reached a billion dollars in sales, he threw a party for his executives. There were 80 or 90 of them at the party and he gave each of them a very unique bear that he signed on the tag and called it the “Billionaire Bear.”

Well, I had a dealer friend who had a friend that worked for Ty in Northbrook, Illinois, and she was at that party. She got hers and picked up a few that people left and then my friend made them available to me for $10,000 each. I was like, “Whoa, I’m not touching that until I know I have a buyer.”

I offered them to my English guys and they went around and shopped them to their biggest, most willing-to-spend collectors and sold two of them, for how much I don’t know, but they were willing to pay me $35,000 each!

So, I bought two for $10k and sold them for $35k each (so, spent $20k, made $70k and profited $50,000.) But, for a transaction that large, I decided I was going to actually go to England and deliver them in person.

I collected the money and came home with $70,000 in U.S. dollars in cash in my suitcase and breezed through security. Can you imagine doing that in the world we live in today? 

That $25,000 was the highest single profit that I made on any one Beanie, but I got very close to that on a bunch of others.

From Beanie Babies To Vacant Houses – The Key Lessons I Learned

Here’s what all of that taught me about real estate. I discovered that, it’s true, it’s easier to find a house for a buyer than it is to find a buyer for a house. 

So effectively, you find out what your buyer wants and is willing to pay for it. Then go get it, buy it for less and provide it to your customer. I did this over and over again for my dealer buyer friends in the UK.

In the case of wholesaling houses, our customer is a rehabber or a landlord or both. Either through a relationship or through our Cash Buyer Data Feed, you can go and find these buyers and see exactly what they’re buying and exactly what they’re paying, and then go find them what they want. I then discovered that the easiest and most direct way for me to find a house that my buyer wants and buy it for less than what they are willing to pay for it, was through vacant houses.

I would know what my buyer wanted in terms of location, size, amenities like number of beds and baths and I would go and search every vacant property I could find that fit those parameters, make offers on them, get an offer accepted and mark it up and make my profit.

The solution, what made it work, was not just randomly looking at houses that fit their criteria. It was specifically looking at vacant or abandoned properties, because, if you think about it, every vacant house, with the exception of someone’s second or vacation home, is a representation of a problem the owner has. Let’s face it, a house sitting vacant is a problem, if for no other reason because you’ve got vermin, vandals and vagrants that are all preying it.

You’ve also got an insurance problem with vacant houses. You might not know this, but if you have a vacant house with a homeowner’s or a landlord’s insurance policy, and that house is vacant for more than 30 days, there’s a pretty good chance your insurance is not actually covering you. Most policies contain an exclusion giving them an out and they would most certainly exercise that exclusion and deny your claim.

Read your policy. More than 30 days of vacancy, and you’re likely not covered. So every vacant house represents, just on its face, a problem or problems, all potentially motivating the owner to either get rid of it. That was a big discovery for me.

If you’re thinking that vacant houses may be a good way for you to grow your REI business, I suggest you look into the Vacant House Data Feed. This tool gives you instant access to millions of verified vacant houses nationwide. You can check it out here.

Another critical lesson I learned from buying and selling millions in Beanie Babies, that translated to real estate, was that I became comfortable with making large sums of money. Some people never get comfortable with that, and therefore never experience it: in some cases because of a lack of confidence or worse, self sabotage.

So, I got very comfortable with that. I made $50,000 on two Beanie Babies in a few days and there was very little work involved. The concept of making large sums of money and that being normal and okay and part of my every day, became a reality for me.

And Then, The Music Stopped…

For several good reasons, largely overproduction of new versions by TY, the demand collapsed and values dropped like a rock.  Here it is, more than 20 years later, and I look back on that journey as a real eye opener lesson for me. 

The Beanie Baby bonanza was fast and furious and ended, just like that and luckily for me,  I only got stuck with one box of an assortment of them when the music stopped. All together I had about $15,000 in the ones I got stuck with but, over the course of those two years, I made almost a million dollars in profit. 

I looked at the 15 grand in that box and thought, “Hey, so what?” And I still have them and, every now and then, I’ll go on eBay and take a look at what stuff is selling for and, interestingly, prices are up again. Older collectibles like Beanie Babies and Pokemon Cards are bringing big money again. If you’ve got some left over from those days, now might be a good time to sell them.

That’s my story. That’s what buying and selling millions of dollars in Beanie Babies taught me about real estate and, in particular, flipping vacant houses.

Have You Worked With Vacant Houses?

What are some BIG lessons you’ve learned that have helped you in the world of real estate investing? Have you worked with vacant houses? Let me know in the comments! I personally respond to each comment and I love hearing from you.

Regards,

Cameron Dunlap