I found a property to flip in Columbus Ga and closed on it 01/06/21 and now my stomach is in knots. Is this normal on the first one and does it get easier to push through the more you do? It is not an extensive rehab. Numbers are as follows:
4bed / 2bath 2250 sq feet
$20-25 Rehab (LVP, Kitchen Cabinets, Granite, SS appliances) Update one small full bath, update 1 tiny full bath, paint full interior, fix other odds and ends.
ARV $130-140 3bd/1.5bath for $116k and needs updates to kitchen and baths. 2100 sq feet, no car port, very small kitchen in comparison.
Am I freaking out for no reason or is this like an initiation into the flip club?? Also, I think an exit strategy B would be to BRRR the property and get some of the capital back out. I have a property 7 mins away that I bought in 2019 and has been rented since day 1. 10 minutes from Fort Benning.
Thoughts? Don't hold back either! I am a grown man and can take criticism. I want to learn from each experience and you can only learn if you are willing to let people tell you what you did wrong.
House next door sold for $116
Calm down! The knots you are feeling are the excitement of having your first project. What works for me is working through the worst case scenario. Once you work through that you will realize that the worst case scenario on this deal is going to result in death and destruction.
The worst case scenario is that you loose money and you can even recover from that. Move through your plan and you will be fine. Control the things you can't and let go of the things you can't.
Congratulations and Good luck!!
I expect it's normal butterflies. Fear is a perfectly natural emotional reaction to anything New and Big and Important and comes with Risk.
Give your rational mind some exercise. Run the numbers once (or twice) more to make sure there aren't any little "gotchas" hidden in your initial assessment. There are bound to be some unpredictable "gotchas" anyway, and you just handle them when you find them. Remember, you still have your "Plan B".
If your rational mind is satisfied that all is well, then just tell your emotional mind to Shut the Eff Up. It won't, but you can tell it anyway.
Remember that old adage by that Important Person who's name I forget:
"Courage means you feel the fear and do it anyway."
It is normal. You have a plan, just get going and you'll be fine.
Full send! Don’t look back and break everything down into bite size problems. The numbers look fine. Just keep an eye on your rehab budget and make sure you’re creating a product someone actually wants to live in and not just checking off boxes. Also, I’d recommend to spend $1-2k to stage it if you can, will help on the sale when done.
A typical flip will cost more to fix than planned, it will take longer to fix than planned and it will sell for less than planned. Now that you know that, move forward. Consider this first one an education and it may cost you some money but it will really help for the next one. If you break even or make a bit, consider it a win.
@Jimmy Epolito You will be tempted to overspend. A lot. Be disciplined with your budget so you have margin for the unexpected. Don’t be afraid to ask for 10% off at Box stores they will typically honor it or find a way. Subs will make deals as well if you pay quick and offer future work. Find two or three things a buyer will love and do a little extra work there- you may even find your signature “look”. (Ex: an updated fixture, an accent wall, updated landscaping. I love mud rooms and make a sharp looking but inexpensive bench and coat rack.) Also, try not to “eat” your profits so you have more available for the next one!
House next door sold for $116,000 is similiar to yours. If yes i think its time to get Freaky.
You dont have much room for error.
What you are feeling is perfectly natural. Take a deep breath and execute the rehab plan you have to the best of your ability. Worry about what you can control and things will fall into place.
Good you are feeling something because it will keep you on your toes and hopefully your project to stay on time and on budget. These are the two things you want to stay on top of!
Most projects take longer and cost more than anticipated. So, focus your energy on those two elements and you will be just fine.
Good luck on your first flip!!!