Real Estate Agent · Clermont Florida · Member since 2019 · 55 posts · 83 votes
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:
$80k purchase
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.
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.
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.
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."
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!
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.
Are you completing thing repairs yourself or subing out the work?
You don't have to share here, but be very clear and detailed writing down what your small updates are for the bathrooms and what are the odds and end.
Make a checklist, then start tackling the work and don't worry about efficiency right now, or if subbing out make that checklist and start getting at least 2-3 quotes for each task
Thanks for all the great replies!! I absolutely love this community. My fear is turning into excitement as I finally realized that this is the start of my own business finally. I have wanted to do this for years. I have already learned so much from each post. I am amazed how much I learned just up to this point and the rehab has not even started! I am using a HML so I am learning that I underestimated holding costs, did not think about yard maintenance while it sits for sale, etc. I learned that I need a bigger spread on the next one to not be in panic mode. I am subbing it out as I live in Central Florida and this one is in Columbus Ga. It is only 6 hrs away but I am a 46yr old father of 4 kids with the oldest being only 6.5yrs old! I did drive up there to see the house and brought my 2 oldest girls and they were pointing out flaws!! I wanted them to see what I was doing to provide. I will keep you all updated.
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!!!
Thanks a million!! That is what the HML told me! She told me that the fact that I am a bit stressed shows I will pay attention to details.
Hey everybody! I would greatly appreciate your professional opinion on the following scenario. After closing on this house I had some contractor drama and decided to reach out to a different contractor who my realtor had vouched for. Below I will paste the scope of work which was sent to me and it seems a bit high and is not broken down between labor and materials. They've been difficult to communicate with so again I am frustrated and started talking to my family members about this. One of my family members has offered to round up a couple others who have experience with doing the type of cosmetics needed at this flip and will not charge me any labor whatsoever. Now here is the conflict: the contractor who has quoted me to do this rehab can start tomorrow and be finished within one month. I think for the scope of work this is really a couple weeks job. Their scope of work does not include appliances which I do need and that would be a stainless steel refrigerator, dishwasher, and stove. It also does not include an undermount sink with the granite in does not include a back splash. I have a hard money loan on this property so the fact they can start tomorrow is appealing however if I utilized my family I will save a tremendous amount just on the total job. And that includes the holding costs involved in waiting a little longer because my family would not be able to start this job till the second week of March. They could handle a lot of the initial aspects of it between now and then such as measuring, ordering all of the supplies, and putting together an effective game plan. I would also be able to have more control over this project. The scope of work below is quoted at $19,000. I know you need to know the condition of the house to help me decide on which path to take so I'll do my best to give you a brief description. The interior upstairs has hardwoods which are poor cosmetically but do not need to be ripped up. The walls are in pretty good condition and only have a couple of minor cracks and typical flaws you would see in a home built in the 60's. Upstairs square footage is approximately 1150 sq ft. the basement will have approximately 8-900 finished sq ft. Downstairs is all concrete floors so there would not be very much prep to lay down either laminate or LVP. Here is the scope of work which they are proposing for $19000
Scope of Work
Paint throughout including trim, doors, and windows.
Luxury vinyl floor and carpet on lower level
Granite countertops - total of 26 sq ft
Install new vanity
Remove old tile/clean tub and replace shower door - retro wall tile the color of Pepto bismal
Replace 2 doors
Install drywall @ bedroom with brick wall and fireplace whitewash - drywall would only be installed on 1 wall
Run AC ducts in basement rooms - tie into existing trunk lines
Trim roof of storage shed and add support posts to deck above
Replace broken glass in two windows - 2 single pain sections
Check all outlets/change light switches
Touch up exterior
Trim bushes
Paint kitchen cabinets and change hardware
Remove the wall light fixtures
Cover up pipe in basement bathroom
Replace toilets and light fixtures in bathrooms
Change all doorknobs for new ones
Replace doorbell
Replace thermostat
Remove storm door
Cover up expose electric wires in bedroom closet
Caulk all exterior windows and doors
Repair retaining wall
Pressure wash the exterior
Clear all debris of the house roof and replace any damage shingles
Replace all tiles in drop ceiling
Remove iron railing and construct 4ft wall around stairwell
