The First Flip Adventure Winds Down

Once again I apologize for not posting more frequently. There has been a lot of activity but not enough for a post until now.

Lessons learned since my last post:

1) Rehabs take longer than you think. When we started our contractor told us it would be done in 3-4 weeks. Here we are at 2 months and it's just been wrapped up.

2) Don't always go with the cheapest bid/materials

3) Communication and your team working together are KEY!

Since my last post the rehab has been completed and the property should be listed on the MLS by this weekend. Our contractor did all of the work, then the realtor came in and pointed out items that she thinks could have been done better. This leads to lesson #3 above. Our contractor was upset that the realtor came in after the fact and pointed out things that should be changed. The realtor was upset that things weren't done to the standard she thought they should have been done. On our next project we'll sit down with the realtor and contractor at the beginning of the project to set everyone's expectations. 

After the rehab was complete the realtor looked at the house and said "The house looks fabulous, but....." Since we live in California and the property is in Florida we couldn't visually inspect every aspect of the rehab. Our contractor had a vendor come in to put in the new kitchen & bath cabinets and counter tops. The bid was good so we went with it. What wasn't explained to us (and what we failed to ask about) was the quality of the granite counter tops. The realtor went in and sent pictures which showed major "flaws" in the natural stone. These weren't bad cuts by the vendor but natural "flaws" that you may not want to see in your kitchen or bath. Our options were to rip out the counters and pay $5-6k for new/better counters or go with what was there. They weren't horrible so we decided to leave them and learned our lesson.

At the last minute we decided to have the exterior of the house painted. We hadn't planned on this from the beginning due to our budget but decided at the last minute to do it. While the house looks much better than it did the job wasn't done up to our standards. The again, the job cost us $1,500 so you get what you pay for. Since it was a last minute decision we didn't shop the job but should have. Another lesson learned. 

At the end of my last post our standing total was $74,078.69. Since then we've made another payment to the contractor ($10,000), put a deposit on the cabinets and counters ($2,430), purchased appliances for the kitchen and toilets for the bathroom ($1,225.58), purchased lighting fixtures for the kitchen and bathrooms ($289.62), a new light for the dining room ($69.20) and paid holding costs including HELOC and utilities ($348.58). As of today our total is $88,352.27. We have to pay the remaining balance on the cabinets and counter tops which will be about $4k and our outstanding balance with our contractor of about $5,000 plus a few more holding costs before as well. Then we have to factor in real estate agent commissions, closing costs and capital gains taxes.

We'll be listing the house for $144k and I'll post the listing pictures once I have them. 

As expected this has been a HUGE learning experience for us and as I said in the beginning, if we didn't make a single dollar it would be worth it for the education. Even with the setbacks it looks like we should still make a good profit and get a good education.

I'll post a final post once we have paid all of the bills and sold the property to give the final numbers. 

I hope this has been informative for you as we go through our learning experience together and has given you inspiration to start on your own project or at least start pursuing it.

If you have questions feel free to post them here (or criticism) or connect with me. I'm always happy to share from my experiences as I have learned so much from others here on BP.

Cheers!

Eric