1st Rehab Complete. Thanks BP

22 Replies

I just finished this house and we're scheduled to close on Tuesday. It needed everything; plumbing, electrical, HVAC, roof, windows, insulation, drywall, flooring, all new fixtures.

I had to remove the entire second floor and rebuild it; 2 bedrooms and 1 bathroom. When I say, I, I mean I was the lead carpenter; designed and built the whole upstairs. I'm going to make approximately $22,000 on this deal.

Thank you to BP and its members for their help. Video below.

http://youtu.be/gwfjHS60SC0

Congratulations! I plan on being in your shoes in the near future. How did you get started?

I finally decided to "just do it". For the past 10 years I always wanted to do a rehab and thought about it a lot; but never took serious action. BP has been a tremendous resource and a great confidence builder.

You'll never know everything you need to know when you decide to do your first one. But you'll learn a TON after you complete your first one. The experience I gained on this one far outweighs the $22,000 reward.

Congrats !!! Looks very nice.

How much did you spend on the remodel ? Do you have a break down of your rehab expenses ?

@Yavor Tomov I haven't finalized my spreadsheets but I'm all in for about $135,000. Selling for $165,000. I could probably get more if I listed it on the MLS but the buyer has been interested for the past 4 months and has picked out most of the fixtures, colors, etc.

Congrats!

Did you secure any type of non-refundable deposit or option fee from buyer?

Congratulation @Ryan R. If you don't mind me asking, how did you finance your deal?

@Rocky V. Sort of but not in the conventional methods. She purchased the appliances and glass door knobs ($1,400) and some other fixtures; so she was invested into the property.

@Joseph Wood all cash.

congrats man.

question. how did you know what the repair costs were going to be? i am trying to wholesale some property so i didnt know if you may have a formula of some type or if you just had a contractor come in

@Account Closed I had estimated around $110,000 all-in but that was before I realized the second floor needed to be rebuilt.

I was pretty familiar with costs, much more so now, so I actually was pretty close on everything other than missing the second floor added cost.

Why did it take you ten years to do your first property?

@Patrick Jacques Excuses. The same as most people. No time, no money, too risky blah blah blah.

@Ryan Ilardi @Yavor Tomov @Rocky V. One of the best sources of information I found was J. Scott's website 123flip.com and listening to his podcasts and following his posts.

I think I've read almost every page on his website and I've pulled my calculator out and analyzed his numbers. He relieved a lot of my fear and excuses through his website and his honest posts on here. Unlike a lot of faces in real estate,he is genuine; he is legit and grounded and he's not selling some pipe-dream.

Congrats, the house looks great. When/if you ever do a 1960s or later rehab, you will then begin to really appreciate how much foundational quality you were working with on that 1940s house. No matter how crappy the condition of that house, there are design/architectural elements and construction/material quality that disappears in the late 1950s in most areas.

I'm glad to hear you have a buyer, but I regret that you will not get the feedback and offers an MLS listing would have generated. Your buyer was smart to commit you early on. I think you may have undersold the house. By not offering it to the open market you cut yourself off from finding out what buyers like and want, and what they are willing to pay for. That being said, if you are happy with the known profit, it's a great rehab deal for everyone!

Originally posted by @Ryan R. :
@Ryan Ilardi @Yavor Tomov @Rocky V. One of the best sources of information I found was J. Scott's website 123flip.com and listening to his podcasts and following his posts.

I think I've read almost every page on his website and I've pulled my calculator out and analyzed his numbers. He relived a lot of my fear and excuses through his website and his honest posts on here. Unlike a lot of faces in real estate,he is genuine; he is legit and grounded and he's not selling some pipe-dream.

I couldn't agree more. It was J's website and blog that pushed me to finally do rehabs instead of selling to the rehabber or landlord buyer at a discount. I had sold more than 80 properties and had assumed rehab required magic skill and lots of capital. It was J's website (and another, flipping junkie) that made it clear to me that I could do it myself. I studied the pictures and the numbers for months. On my last rehab I only visited the property once. No special skills there. :)

Originally posted by @Ryan R. :
One of the best sources of information I found was J. Scott's website 123flip.com and listening to his podcasts and following his posts.
I think I've read almost every page on his website and I've pulled my calculator out and analyzed his numbers. He relived a lot of my fear and excuses through his website and his honest posts on here. Unlike a lot of faces in real estate,he is genuine; he is legit and grounded and he's not selling some pipe-dream.

Wow, thank you Ryan...that sincerely means a lot and literally brought a big smile to my face...

Congrats on the project...and I hope all the new investors will read and re-read this one sentence you wrote above:

The experience I gained on this one far outweighs the $22,000 reward.

Perfectly said. In my experience, very few real estate investors only do one deal -- they either do none or they do a lot. The reason being, it's tough to get through that first one, but if you do, everything after that seems very, very easy...

Again, congrats!

Kristine Marie Poe Thanks. You are right about the build quality. This house was built well; strong foundation with perimeter wall and termite shields as well as shiplap interior siding on all walls. The problem with the second floor was that it was converted from an attic somewhere along the way and instead of bringing in floor-joists, they used the 2x4 ceiling joists that were there as floor joists for the second floor.

I also wanted to list it but I couldn't do that to this buyer. She would come by all the time and tell us how good we were doing and we would discuss price etc. I had several realtors come by towards the end and ask if they could list it but I already had a deal, in principle, with this buyer. I'm making a decent profit, especially for my first one and the buyer is thrilled. A bird in the hand is worth two in the bush, I believe.

Originally posted by Kristine Marie Poe:

I couldn't agree more. It was J's website and blog that pushed me to finally do rehabs instead of selling to the rehabber or landlord buyer at a discount. I had sold more than 80 properties and had assumed rehab required magic skill and lots of capital. It was J's website (and another, flipping junkie) that made it clear to me that I could do it myself. I studied the pictures and the numbers for months. On my last rehab I only visited the property once. No special skills there. :)

That's kind, but I'd still be willing to bet that you've been more helpful/instrumental to my business than I've been to yours!

Ryan,

Fantastic job man, well done!

Nice job, thank you for sharing. Your music video got me jazzed up about getting started in Rehab ;)

@Ryan R. Congrats my friend. You may have gotten more if you listed it on the MLS but how good did it feel to already have a buyer locked up during the rehab process? That feeling is priceless I'm sure.

I just finished #1 and am itching to get into #2 as fast as I can, but those good deals are tough to find. Good luck to you in the future and thanks for sharing.

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