SOLD!! $37,000 Profit - A flip I only went to 4 Times...!

Real Estate Success Stories 41 Replies

Hey Bigger Pockets!

Once again, I would love to post a lot more often, time just keeps getting the best of me though and there are so many deals to do in this market!

As normal, I like to post the unique deals that I think you can learn the most from.  This house in particular is in Portland Oregon, and I live about 3 hours away near Seattle Washington.  One of the things I constantly seek to improve upon, is spending less and less time physically at any of my houses.  I believe I can help people a lot in this arena.

The Deal

The biggest key to my success in real estate has ALWAYS been finding and building a great team and networking with the best at all times.  When ever I have gone into any new market, I always spend the time head hunting the best, and I constantly do it in my main market of Seattle (like tonight there is a BP meetup I need to hurry and get to...).

This house was brought to me by a fantastic realtor in Portland, OR. Can you believe this was on the MLS?? The deal was tied up by a developer who planned on fixing this house but also sub dividing the back half of this large lot and building a few units back there. Apparently after their feasibility period, the builder dropped out and left the sellers desperate for a new buyer. My agent jumped on it and I put a lower then list price offer in right away the day it fell out, 3 day inspection, close in two weeks. This got the sellers on board.

Granted, I did NOT want this house, I did not think it was a deal at first.  One of the problems with being outside of the market (me seattle, this Portland), is not always knowing up and coming areas.  But I trusted my team, that's what they are there for. 

I went to the house the 1st time after we had in contract during the 3 day inspection, I still didn't like it, I then told my realtor to counter at inspection with a lower price (I thought they wouldn't take it, and then get me off the hook without upsetting my team)...and the sellers took my new price which was 10k less then my original...now I was STUCK with the thing and had to make it work.

How to do this from afar?

While walking during inspection, I took about 100 photos from all angles, why?  Because I don't want to come back to the house. I need to have all angles of the house so I can work with my contractors via pics from afar and not wonder or remember anything.

I then, over the phone with my realtor, went through the whole house with pics and agreed to the rehab plan (most of which we did in person during inspection).  I then sent my local GC there (the one I trust and found).  He then confirmed my rehab numbers, we set the contract and he started working the day after close of the property.

2nd time I went to the house was when I was in town looking at other houses to buy.

In between this time, I have local friendly agents and other investors I've networked with that would drop by and take 50-75 pics of the house for me during the weeks, and drop box the pics to me so I can see progress.

3rd time I came by was to drop off some material we can only get for cost in Seattle.

4th time, the house was done and already listed, I only went by because I was in town.

The key is local people, boots on the ground, and then have more local people to watch those people. For instance, have more than one person a week go by and take pics for you, drop box them.  Have more than one realtor (I usually find 5 in a market and work with all of them until the cream rises).  Have IRON clad specific contracts with all your contractors with specific scopes of work, and have them be part of the team so they feel good about taking care of you when you are not there.  Don't get cheap on them when afar, be fair, always, you don't want them resenting you when you are a couple hundred miles away.  I can write pages about how to do this better, one day I will.

The Numbers

Purchase with closing costs: $178,061

2 points to lender (Private Money total borrowed $225,000): $4500

3 months holding cost and 10% interest (utilities/taxes/interest): $1850

Rehab Costs: $46,391

Selling Costs (5% commission, escrow, etc): $17,394

Sales Price: $289,900

NET PROFIT: $36,470

The moral of the story, is build your teams with the best people you can find at the level you are at.  CONSTANTLY look for great people to surround your self with.  If you are looking around and you cant find great people, maybe you are not looking hard enough...maybe you need to become a great person your self?  Always do what is right and fair with everyone you interact with. This real estate world IS VERY VERY VERY small, believe me.  Your reputation is all you have and you want to be the one people want to work with, bring their deals to, refer you to money lenders, etc. 

Good luck to all of you, message me any time!

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE

Great post. Love the choice to use the blue door. Good job.

Congratulations ! Thank you for sharing your story and the lessons learned.

Can you please list out - Details of the renovation work and the time it took for renovation ?

Beautiful, @Tarl Yarber ! And thanks for all the detailed info and advice for your BP pals. 

Great work @Tarl Yarber ! The blue door is a definite win. Looking forward to seeing your next one!

Nice job and great message @Tarl Yarber . I couldn't agree more about boots on the ground. Which part of Portland was the house?

Medium 45mainproperties web 1Neal Collins, 45 Main Properties | [email protected] | (503) 974‑6633 | http://www.45mainproperties.com

Congrats! House looks fabulous!

IRON CLAD contracts with GC. Could you expand on that some more? Do you use a template for GC contracts? Is it a Time and Materials contract? Can you share some tips for me in this area pls

Sonny

Looks great!   Love the blue door!

@Pandu Chimata

Thanks for the post! That's a big list to put on here and ill do my best.  You can tell from the pics we did a lot to clean up of the front and back.  We tore off and rebuilt the entire deck/porch in the back.  Opened up the kitchen and living room.  Updated all the fixtures, bath, refinished floors, landscaping, all new doors, mill work, etc.  Re sheet rocked large portions of the house.  Ended up tearing off the entire roof and rebuilding it from scratch, it was caving in on the front of the house and sagging throughout.  Ultimately it was not that bad of the remodel, in my opinion is was mostly cosmetic with a few fun parts.

It took about 45 days for rehab roughly. Hope this helps

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE

Nice work! Love how you used the pre-existing siding on the front and just painting that and the original exposed brick. Looks great!

Originally posted by @Sunny B. :

Congrats! House looks fabulous!

IRON CLAD contracts with GC. Could you expand on that some more? Do you use a template for GC contracts? Is it a Time and Materials contract? Can you share some tips for me in this area pls

Sonny

Hey Sunny.  Great question! I find that a lot of house flippers miss out on controlling the contracts with their contractors.  This can get you in a tight situation if you allow it.  We have a contract that is now a template for us that we make changes to based on the contractor.  We make the full scope of work, line item it, and have the contractor bid off of that, we control the wording.   If the contractor comes back with their bid and changed the wording, and we don't like the wording, we will take their numbers and add it to our scope that we had given them, attach our contract with our payment terms, and send back to them to approve and sign.  If there is an issue, we discuss and overcome them until they sign our stuff.

I NEVER do time and materials, does not work for me and my systems.  I can see how it can work for some people, but not me, its easy to have that go out of control if you are not careful.  If someone wants time and materials though, ill ask them how long it will take for them to do the task, then ill just times that by their hourly and then offer them to just do the job for that amount only.  Make sense?  I prefer to never deal with that thoug.

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE

@Tarl Yarber Thank you for the response. Looks like it was a quick turnaround. Do you typically hire multiple contractors to do work parallel or work with only one or two contractors ?

excellent work, thanks for sharing

Medium hickservicesMike Hicks, hickservices | [email protected] | 813‑308‑9313 | http://www.michaelhicks.online

Great post! Thanks for sharing. It's very inspiring to read success stories. The after photos look amazing. One think I also learn from your post is never be afraid to paint over bricks! lol 

Hi Tarl,

Thanks so much for responding to my question. Great info!

That means when you ask the GC to bid on your job, do you pick out the materials you want in the home ahead of time? For example, what type of granites or cabinets, doors etc so he can bid based on that?

Sonny

@Tarl Yarber
Who picked the finishing sand colors? They did a great job!

@Tarl Yarber I love how you leveraged people in order to manage your project. I just finished my first flip and it's about 45 minutes away from my condo. Only checked the place on weekends but I always thought about hiring some high school kid and make him take pictures for me. Having realtors and other investors do it for you is a fantastic idea considering you live far from there. 

Nice house, congrats!

awesome work with this long distance fix and flip!

Did you already have the plan and cost-estimates down as far as the repairs the house would need? I ask because you said from the beginning that this was a house you didn't want, and 2- because the private money you borrowed was just enough to cover the purchase/closing and repairs.

I'm eager to see what other projects you take on, either in Seattle or other markets closeby thanks to your amazing team. Keep us posted cuz this fix and flip was TEXTBOOK! Congrats!

Nice flip! Thanks for sharing.

Medium the hanks group 786Rod Hanks, The Hanks Group | [email protected] | 214‑275‑8372 | http://www.hanksgroup.com

Originally posted by @Jeff Brower :

Nice work! Love how you used the pre-existing siding on the front and just painting that and the original exposed brick. Looks great!

Hey Jeff!  We actually had to repoint and tip most of the brick on that house, mortaring most of it cause it was falling apart.  Painting it is the best way to making it look great, because after repointing, it usually doesn't look all that great.  Paint hides all of that.

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE

Originally posted by @Pandu Chimata :

@Tarl Yarber Thank you for the response. Looks like it was a quick turnaround. Do you typically hire multiple contractors to do work parallel or work with only one or two contractors ?

I like that you asked that question.  In my local business (Seattle WA), I hire multiple contractors per project in order to keep costs down.  Sometimes I can throw a GC on the job here, but I ALWAYS sub out direct myself the big stuff that GC's always sub too (ie. Roofing, flooring, electrician...).  However, on anything I do and have done from afar, I tend to hire one GC for the job. I pay more this way, but coordinating multiple crews from a long distance is very challenging especially if you are busy so many other things.  If I had it my way, I would hire a GC for every job and then not worry about it, however, in my location, that is impossible to do if you want to keep under budget and turn a tight margin deal into a much better margin deal.

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE

Originally posted by @Sunny B. :

Hi Tarl,

Thanks so much for responding to my question. Great info!

That means when you ask the GC to bid on your job, do you pick out the materials you want in the home ahead of time? For example, what type of granites or cabinets, doors etc so he can bid based on that?

Sonny

Yes, that is correct.  We have a very simple process with finishes in my business.  I have two finish types typically: Brown and Gray.  Both have their line of fixtures/granite/quartz/paint/flooring etc etc etc.  I very rarely change these unless something is out of stock or becoming out of date.  For hire end stuff, things can change for that particular project, but for the most part we either choose the grey finish packet we have, or the brown.

Ill give you a little piece of advice, this is not a piece of art we are creating (in my mind), its a retail product to sell to the public.  We don't need to change everything every time, the person buying the house has no idea, or cares, that its the same finish as the last 10 houses you did.  Keep it simple and do what sells the house.

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE

Great post.thanks for sharing lessons(iron clad contracts with GC, time mgmt, simple colors etc)