Success Story! Home run first deal.
Hey BP community, thanks for openly sharing so much knowledge and experience! I've learned so much.
Just finished my 1st live-in flip… that I stayed in for 5 years because I loved it. I bought the house in 2012. It was in Mequon (which is an affluent Milwaukee suburb), it was an estate sale tri-level that had been on the market for over 6 months with zero interested buyers. I threw them a low ball offer that offended them, and we countered several times and we settled on a price that was by far the least expensive home in the area per square foot. It was a 3 bedroom, 1.5 bath, 2300 sqft on 1.7 acres but it had closed off walls, carpet in the kitchen and bathroom, garage that had been converted to storage closets for the old hoarders that lived there and the list of quirky stuff goes on and on.
After closing I was going thru paperwork and found that the previous people took out a $70k HELOC 5 yrs prior and put on a new roof/gutters, siding, water heater, furnace, new concrete driveway, extra insulation in the attic, and some foundation repairs. It was mechanically perfect except for and older air conditioner that worked just fine.
The numbers:
I Did all the work myself except for granite install and carpet laying.
Purchase price $185k + 25k in renovation= $210k invested
Bank interest was about $5k/year X 5 years= $25K
Total taxes paid $21k
Tax free profit because it was primary residence= $63k.
There was a bit of appreciation but not that much.The bank appraisal when I purchased it was $215 and the assed value was $280 so I definitely made money when I originally bought it.
I considered renting it or doing FSBO but called a realtor friend in for a consultation ahead of time. When he told me what he thought he could sell it for I first thought he was crazy, or just trying to overpromise to get me to use his services. But about a month later when he delivered an offer I learned a valuable lesson that sometimes you have to know when to call in the Pros!
I definitely want to pick up some rentals but I’m also trying to find a flip or 2 while I’ve got liquidity. In the future, I absolutely like the benefits of a live-in flip but there’s no way to scale that into a business so i think its all going to come down to what deal i find next.