First Successful flip
Just wanted to share the details on my first SUCCESSFUL Flip.
I purchased the house in January 2017 for $58,000. This was a foreclosure on a very desirable street in town. The bank originally had it listed at $120,000, then dropped it to $109,000, then down to $99,000 which is when it came up on my radar. I walked the property with my realtor and he pointed out a lot of areas of concern that others had pointed out that walked it. This was a great indication that I might be able to get this property at a discount. Most of the things he was pointing out were either easy fixes, or completely invalid concerns. For example: the previous tenants in the house had set up a movie theater in the living room and had run 2x4's across the ceiling to hold up curtains to block out all the light. They also built a wall in front of a wall to stuff insulation in to dampen the sound transfer to the neighbors. All of this made the place look like it was falling apart, when in reality it was just poor construction of a temporary structure inside the house.
So I started my offer at $50,000 which the bank countered with $68,000 as their lowest they could go. My realtor said I should take the deal because they would most likely not take anything less. I decided to try an offer of $58,000 despite his concern and two days before Christmas I heard that they accepted my offer! So lesson learned, never be afraid to stick to your guns, and your numbers!
I ended up financing this property with a local bank who funded the purchase and rehab at 90%. I estimated $67,000 in rehab so the total loan was for $125,000 of which I put $12,500 down.
The house needed a new roof, total rehab in the kitchen and two bathrooms, new furnace and A/C unit and landscaping. As well as some updates to the plumbing and electrical systems. So essentially it was a new house in an old frame. My wife also decided we needed to paint the exterior brick which was not in the original plan, but I think she got it right on with that, the exterior ended up looking great when it was done.
Needless to say, the house was on the market for 12 days before we had it under contract for $212,000
The final numbers on the flip were:
Purchase 58,000
Rehab 75,000
Commissions and closing costs 26,680
Sale price 212,000
Net Profit 52,320
Here are a few pics of the final product!