2nd Utah flip - profited $22k!
Another one bites the dust! We closed yesterday and have officially sold off our 2nd baby, aka our 2nd flip. This project wasn’t nearly as extensive as our 1st, but it was very fulfilling and still learned a ton. This property was purchased through Auction.com and is located in Roy, UT. If you’ve never been the winning bidder on their site but are interested in the process, leave a note and I can tell you about my experience.
We closed on this property 10/7/16 but didn’t begin work immediately because my contractor was working on another project. Once we began, it was about 2 months of work, which is excessive for the amount of work that was done, so I’m not happy about that, but I’ll share why it went longer in my lessons learned section below. I borrowed funds from a private investor to fund this purchase. They covered about $85% of the required cash (repairs and actual purchase), and I covered the remaining 15%. Here are the numbers for this project:
Purchase Price: $140,999
Purchase closing costs: $1,706
Materials and Labor: $31,822
Holding Costs: $9,019 (includes repayment to investor)
Final Sales Price: $220,000
Closing Costs, Commissions, and Staging: $14,667
Total Profit: $21,788
Here are some before and after pictures:
Fireplace before/after:
Kitchen before/after:
These are the major items we replaced/redid on this house: converted the carport into an additional one car garage (not as hard as I thought it’d be), carpet, updated fireplace, paint, updated lighting, appliances, laminate, granite countertops (also added a little shelf to the counter so you sit at a stool to eat), backsplash, painted cabinets, new furnace, new windows, and removed 3 dead trees from the yard. This house already was 6 bed 2 bath, so it had great bones, just cosmetically it was fugly. My wife pretty much managed this project from beginning to end and did a great job. We only had it listed for a week before we received an offer $4k less than our listing price (but $5k more than I had always forecasted, if that makes sense), so we accepted and closed 4 weeks later.
What did I learn this time?
Lesson Learned #4 (to add to my previous post):
Too many cooks in the kitchen. We wanted to help out a neighbor and give him a chance to earn some side income on this flip. We laid out 3 items that he could do and then we would pay him once the job was completed (he wanted to be paid per hour and I didn’t agree). My general contractor advised us NOT to bring anyone else into the rehab, but we still went ahead with our decision. This decision probably single-handedly cost us ~3 weeks of repair time as he kept promising us he’d get his part done. Well, he didn’t, and so we had to call an electrician to tie a couple of loose-ends at the very end so that we could list the house. Lesson: Be wary of hiring friends, family, or neighbors.
We just started our 3rd flip in Ogden this past Monday. It was an MLS purchase. It's only 1000 sq ft so we should be re-listing it within a month.