Our first rehab project - Federal Way, WA
Hi guys, just wanted to share my flipping experience.
Two of my brothers, myself, and our RE agent got together to do our first flip. We discussed our plans and strategies many times and went through number of houses on MLS. Whoever lives in Seattle they know that it's nearly impossible to find something good due to the market.
So we decided to go with an auction at a court house and a hard money lender. Who could think that every other home buyer these days buys his property on auction (at least that's how it seems to be in Seattle). We ended up paying more than we should have. Please, be smarted than we were, do your due diligence and STICK TO YOUR NUMBERS. If you can't win a property it doesn't mean you have to overpay for it.
We ended up getting a 1979 3/2.25 split level house that had an original kitchen cabinets, aluminum windows, and popcorn ceilings.
We ended up gutting the house down to drywall. Upgraded all windows and doors (except an entry door). Bathrooms and kitchen were fully upgraded - all cabinets, tile, fixtures, counter tops, and appliances are new. New engineered hardwood/carpet/vinyl throughout the house, as well as a fresh coat of paint on the inside and outside.
Overall the flipping took us little less than 2 months considering that we worked after our day jobs. Most of the work we were able to do ourselves since 3 of us (2 brothers and I) do this type of work for living. We've hired a few contractors to do popcorn removal and drywall patching, painting, and carpet installation.
We worked well together as a family. But since we brought one more partner and no one bothered to write anything down (we thought we knew each other well enough) we've learned some pricy lessons.
Things to remember for next time:
- Never partner with anyone unless it is extremely necessary.
- More partners you bring to the table - less money you make.
- Describe what everyone has to bring to the table and adjust your profits accordingly.
- Never rely on ARV from RE agents.
- Have everything written on a paper even if you partner with you brother/sister or closest friend ever.
- If you are rehabbing, spend some time at the end of the day and plan for tomorrow.
- Do everything that needs to be done right, but don't get carried away with too many things that don't bring the ARV up.
- Even if you want to save money, it could make more sense to hire a professional to replace your garage door.
- Make money when you buy a property and not when you sell it.
- Don’t scare away potential buyers with your overpriced house.
Here are some pictures of the house.
We've already installed new windows and trimmed them. Garage door also had to be replaced.
Should have taken a picture with old cabinets, but now they are gone. Wall/pantry that separated kitchen from living room was demoed (you still can see on a floor where it used to be). New partition between sliding door and kitchen.