From $25k/yr single flip to over $250k in less than 5 months!
So I planned to write a "success" story after my first flip was sold last year and never got around to it. Partially because it didn't feel like much of a success after all was said and done and I was exhausted. Mentally and physically. I probably should post it under "horror" stories because I think that every bad thing you hear could happen, did happen. Here's the short version:
House was sagging in one corner, looked like dry rot and home inspector confirmed this. Contractor said that it would be pretty easy to jack up that corner of the house and re-support it with new wood. Easy enough. Thought it would add 5 days max to my timeline 😂. Demo day: Started tearing off some "dry rot" siding and laminate floors only to discover that a colony of termites had been munching the house to dust over the last 5 years or so. Dry rot would have been a blessing at this point. We ended up rebuilding 90% of the exterior walls from he foundation up, put all new floor joists in, oh and re plumbed and re wired the entire thing. We basically built a new house. Only I was in denial for the first few weeks and ended up dragging demo out way too long because I wanted to salvage whatever I could. The funny thing is, my dad who has built hundreds of homes in his life, told me to just tear the thing down and start over the day I closed on it, and I got upset because I thought I knew what I was doing and this was going to be a quick 30 day Reno. Well 90 days later, after a series of poor contractors, giant termite extermination bill, begging my dad to frame the house up for free, and long 10 hour days, I finished. I lost my whole summer because I was so "behind schedule" and couldn't bear the $50/ day hard money bill, but I was finally done. I listed it and waited a few VERY long days for a full price offer. Mission complete. Almost. A week from closing the buyer's lender caught a problem. With FHA buyers, there is a 90 day flipping rule where basically you can't sign a contract to buy a house within 90 days of its previous sale. Apparently in my haste to get this deal done, I had accepted their offer 8 hours before the 91st day started. So, we had to resign the contract, order a new appraisal, and basically it took another 3 weeks or so to close. Sheesh.
Good things that happened:
Made awesome friends with the neighbors on both sides and they would bring my coffee and lunch some days. I ended listing both of their houses and helped a friend of theirs sell a house. $15k side bonus (I gave them a super low listing rate for a bulk deal).
Made about $25k when all is said in done.
$150k purchase price
$60k Reno.
$5k hard money (rough estimate)
$10k closing costs
$250k sales price.
Fast forward two months to November 2016.
Met a partner. Bought a house, bought 2 more, bought another, had 3 renos going at once by January(I couldn't believe that's possible) sold those while acquiring another 6, had 6 renos going at once by March ( made 3 seem like a cake walk), wholesaled one, flipped the other 5, and bought another 7, including a sweet old bed and breakfast on 4 acres near the beach (That one is for fun and hopefully a good air bnb). Our company has already cleared $250k as of April (7 sold,2 pending,1 listed yesterday, one coming on the market tomorrow). I can't even believe how far I've come since my first flip. Oh and the best part, I'm not doing any of the work anymore. We have full crews running on all our projects and my partner and I can focus on big picture things like starting a construction company, a real estate brokerage, and property management company. I've learned that you are only limited by what you can dream. I'm so humbled by this opportunity to employ people and give back to the community. I had a goal of doing two flips this year before I met my partner. Once we got rolling we thought we could hit 12. Now we are going on 17 and the year isn't even half over. It's truly mind blowing and honestly I can't take any of the credit. A good partner makes a world of difference!
Thanks BP for all the inspiring podcasts to help me to keep believing achieving financial freedom through real estate is possible!