I purchased a house Oklahoma City in April that I stumbled upon on craigslist. Purchase price was 43K and I spent 28K on a complete rehab (See pics below). This was supposed to be my first flip...but after the rehab was completed, I could not part ways with it and decided to lease it instead. Lease price was $1000 and similar houses sell for 105K (actual sales). Because my house is a complete remodel, I could potentially get up to 110K...So a potential 40K profit...Sweet. Another reason why I decided to keep it was the title seasoning requirement for FHA loans. After I learned that I would have to pay for one of the two required appraisals, deal with a potential low appraisal since flips do not get the best value from appraisers, and have to submit receipts to proof rehab cost and improvement; I decided to just lease it for a year and skip all that hassle.
Here is my rehab cost breakdown:
|$3,500||Roof (Labor and Material)|
|$7,390||Materials ( Tile, Paint, Sinks, Faucets etc...)|
|$6,500||Labor (My contractor is the best)|
|$500||Kitchen cabinet Doors ( Replaced the doors only)|
|$2,700||Front/Back concrete pad|
|$1,300||Appliances (Stainless steel range, MW and range)|
|$3,470||Heat and Air ( New 13 seer Heat and Air system installed! Brand is Goodman)|
|$1,400||Wood floors (250sqft living room/ Handscrapped wood floors+ floor leveling)|
|$1,300||Carpet ( Three bedrooms)|
Next project is already under contract and it’s a probate purchase. A rinse and repeat. But the purchase price is a little higher at 56K with a 15K Rehab cost. Comparable are selling for 98K. So a potential of 27K profit...only if i sell it :-)
Thanks BP community and Happy Investing.
Ugly looking house. I love it!!!
What neighborhood is this property in?
Also, nice job on the recap.
looks like warr acres/bethany/nw okc area. keep an eye on the sewer in that age of house, they are always acting up for us and slabs are the worst when time to fix it.
Great job!!!! People doing projects like this add so much value to the area! From run down to very nice...great transition
@Rhett Tullis , you're not even allowed to THINK the word orangeburg tile :-).
Its on Hillcrest DR -SW May and 89th. Pretty nice area. The last three sale in my street were mine at 43K, the house next door (1400 sqft sold for 121K) and the house across from me (1300sqft sold fro 118K) . So, a pretty good area overall all.
Lets hope for the best! I have never had to deal with Sewer lines issues, But now, i know who to ask for expert advise :-)
lol yeah, we bought our own sewer camera and line locator, sure comes in handy. i own a few down in that area and manage several. you are in moore schools I think so that will help with rent. we are getting 1200 for several around there so you may want to do some research prior to listing.
Already got it leased at $1000 and yes it is Moore Schools. The house is only 1200 Sqft 3/2. Are you getting $1200 on simillar sized homes?
we have one at 1100 at that size and a few 1200 that are about 200 sq ft bigger.
Thanks for sharing!! I love seeing before/after pics. Good luck getting it rented.
The property looks great. Good job!
@Amine E. Looks awesome! I would love to do something like this one day. Some noob questions for you:
1. Did you have previous experience rehabbing? Seems like you know what you're doing.
2. Do you decide what tiles/counter/cabinets to get or do you have someone else help?
3. What was the neighborhood like that you bought the house in?
Great photos, nice job.
Another advantage of renting it for at least a year is the income from selling it becomes a capital gain from selling an asset vs pass through income from a flip. Much improved tax wise. I am a buy and hold person but have some properties I could see selling after 5 years or so.
I'm with you on keeping for rental instead of flipping, although my intent has been that way. The way I see it..
Why have a feast for only one night (and share that feast with the tax collector, hard money lenders, realtors, etc), when you can have someone pack you a nice lunch every day, all for yourself?
Thanks for posting the nice before/after rehab pics. I only posted one unit so far of 3 vacant units I'm rehabbing (bought just over a month ago) but the rest will be coming..
Your fix-up gave me nice ideas for the next one. But curious, how much of your own time is in this? And if you knew you were going to rent it, would you have improved the property as much as you did (beautifully might I add). I'm always trying to strike that balance of improvements to make sure every dollar I add to the property increases the ROI, rather than just making it look how I think would look good.. so curious how others approach it also.
Very informative! I love the breakdowns with costs and photos. My favorite quote, "My contractor is the best". You don't hear that too often!
great job I know that area well. Good luck with the next rehab.
Well done man!!!!
Great job @Amine E.
Originally posted by @J Martin:
And if you knew you were going to rent it, would you have improved the property as much as you did (beautifully might I add). I'm always trying to strike that balance of improvements to make sure every dollar I add to the property increases the ROI, rather than just making it look how I think would look good.. so curious how others approach it also.
You need to look at your competition, go to open houses, look at sold comps, etc. and determine level of finishes and at least meet that level (better to beat with a few wow items that don't actually break the bank). If everyone else is doing laminate, you spend a bit more and do granite, if everyone else is using fiberglass one-piece shower surrounds, you do tile. You don't have to go crazy, just a few odds and ends that put you over the top.
I like your title on this post. And good job the rehab!
In my opinion REI is 10% dealing with physical property and 90% dealing with people. If you surround yourself with good people, the rest is easy. So don't give people second chances. If they screw you once, they will do it again.
Thank you everyone for your comments
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