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Lynn Weber
  • Residential Real Estate Agent
  • Fort Worth, TX
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First Flip - Success in Benbrook, Texas!

Lynn Weber
  • Residential Real Estate Agent
  • Fort Worth, TX
Posted Jan 16 2016, 18:23

We closed on our first flip back in July 2015 (yes, it's taken me a while to post)! We started REI in October 2014 (we being my dad, my sister and I, and our husbands), and got a duplex in early February 2015 to hold, but have been struggling to find something with room to flip. Things that were in need of flipping in the neighborhood I want to concentrate on were selling in the fall of 2014 for $85K with an ARV of $120K. Now they are $125K with an ARV of $150-180K. Crazy! We ended up going outside that neighborhood but are still looking there. This home is 1583 sq ft, 3/2, and was listed with our Realtor November 2014 for $105,900 but needed some cosmetic updates (paint, flooring, etc.). It didn't fit our criteria at that point, so we never gave it a second thought. In February 2015, the former owner foreclosed on the owners at that time because she was doing owner-financing for them and they had stopped paying. Then she called our Realtor and said she needed to get rid of it ASAP and wanted a cash buyer. Cue, us!

We went to look at it toward the middle of March 2015 and there were holes in walls, missing fixtures, odd electrical (the wiring for the back porch light and exterior outlet have been pulled into the master bedroom), tiles missing in the master shower (green plastic was duck taped across 2/3 of the surround so they could use it anyway), and cabinets missing that were not that way in November when it was listed with our Realtor. Nothing there or in the inspection deterred us though, it looked to be a pretty simple flip. This house has an extra two car garage, and a huge lot, so we were hoping that would be a plus. We got it under contract for $75K and closed in April 2015. We used a personal line of credit from our investments. The seller refused to pay our Realtor any commission, which really sucked (I got my license in April 2015 and now work with him and he got a bonus for bringing me on, so I feel slightly less guilty). We expected the ARV to be $125- $130K, possibly $135K, and we had five contractors come through, ranging from $20K - $35K. It was supposed to be about 3-4 weeks of work and DOM are averaging 26 in this subdivision. We didn't plan on making a lot, but figured we've got to start somewhere! We ended up using the $20K contractor because he was recommended by another investor/friend who had used him multiple times.

Here are the before photos (many from the listing last November, so pre-holes):

As we were working on it, a guy who was interested stopped by and talked with my dad about the house. He sounded pretty interested and they kept in touch throughout the work being done. Contractors being contractors, it took about twice as long as they estimated because they didn’t have enough people working on the house at any given time (usually only 1 or 2). But by the time they were finished, we were under contract for $140K.

Purchase - $75K

Construction - $22,368

Carrying/Closing - $5,052

All in - $102,420

Sales Price - $140K

I was a little concerned with the sales price being so much higher than we started out expecting, but I didn’t need to worry, it appraised at $142K. There were some delays with the buyers financing, so our closing was extended from July 7 to July 23.

Total profit = $37,580

After photos:

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