Hey BP! We finally closed on our first flip on Friday and I now feel like I can post about it! After being under contract 4 different times, I feel numb to the whole selling process and it hasn't actually hit me that we're done. Okay, numbers:
Purchase Price: $47,200 cash (County Foreclosure Auction)
Renovations/Holding Costs: $33,792 cash
Sale Price: $129,900
Closing Costs: $14,378
Total Profit: $34,630
- New Roof
- New Windows
- 2 New Electric Subpanels for A/C
- Gutted the kitchen, opened up wall into Bedroom #1
- Relocated front door
- Framed out closet in what was the living room to make it Master Bedroom
- Added a half bath to the laundry room area which became master en-suite (the home was permitted as a 1.5 bathrooms and when we got there there was only 1 bathroom so we added the half bath)
- Redid the kitchen entirely
- Completely redid the bathrooms, turning one into a 4-piece
- New floors throughout house
- New landscaping
I estimated about $30k in repairs (after initial walk-through and having already purchased the property). We went a little over but it's because we ended up adding the 1/2 bath and rearranging the entire layout of the house to make it open concept. I conservatively estimated ARV at $100k. We were able to sell at $129k because of a few reasons including the market having gone up in general in the past year, and also because we spent the extra money and time to add that half bath and open it up. We ended up making this house the nicest house in the neighborhood which many people say not to do, but because we were doing everything ourselves, it wasn't really more money to make the finishes nicer; and I feel in drew in more buyers because they fell in love with it the minute they walked in.
We cursed A TON. We cried A TON. We learned A TON.
I think the biggest lesson was that we should have contracted out almost everything. We saved probably around $15,000 doing it ourselves, HOWEVER we spent an extra probably 9 months doing it ourselves because we could only work nights and weekends. So when you factor in the opportunity cost, and the cost of our labor, it was not worth it. Although, I am a proponent of doing a whole renovation yourself because if we are ever in a pickle in the future, we literally know how to do everything.
Okay so everyone's favorite part, pictures:
Hope you guys enjoy!
Congrats @Thea Linkfield ! Looks amazing and I think that it was well worth the extra time and effort if you made out with some decent profit and a ton of new knowledge! Would love to learn a little more on how you chose that property from the county? Did you have time to do any due diligence before hand and did you always have this particular property in mind before the auction? Courthouse or online?
Great job again and looking forward to seeing your next success story...which will only take 3 months next time I'm sure. ;-)
It looks very nice. You made nearly 35K on your first flip. That is amazing! A lot of people don't make 35K a year working 40 hours a week. Be very proud of your accomplishment, which I can tell you are.
Great job. Write down your mistakes and what you would do different next time. Looks like you learned a lot while making some money.
Great post! Any advice or tricks after going through a county auction process?
Great Job, Just reading these is motiviation enough
Nicely done! Made money and learned a ton!
wow, looks amazing, great job! And, thank you for your blunt honesty on your process, helps others a lot!!
Nice job..I hope I get that lucky..but first I have to win a offer in this tough market.
Congrats, Thea! Very welldone. I love the color you chose. Waiting to read about your second flip! Thank you for sharing.
Thanks for sharing and going in detail.
Congrats on your success! I wish you many more, and look forward to more of your posts!
Beautiful job! Love the blue paint, so charming. You basically paid, through your sweat equity, for tuition in home remodeling! Excellent. :)
@Jon Crosby Thanks for your reply! I bought it through the county foreclosure website online. In Duval County, FL I think that's the only way to do it (someone correct me if I'm wrong). I actually had my eye on a duplex in Atlantic Beach that bid that same day. I had the funds in my account ready to bid on that one. The morning of, the foreclosure sale of the duplex property was canceled (as most do in Duval). This one was a back-up that I had on my "watch list". Properties on my watch list basically consist of properties that are assessed lower than the plaintiff max bid. The assessed value from the county website is typically lower than market value, so if the assessed value is higher than the plaintiff max bid then the market value is probably going to be a good bit higher than the plaintiff bid. So the morning of I did due diligence on the property which included checking for other liens (nuisance liens, making sure this was the first mortgage, and tax liens). There appeared to be none so I went for it! I didn't do a drive by, and didn't even do a google earth drive by (I'm not sure why because I usually do this with every property I'm even vaguely interested in). And honestly I think if I did either I might not have bid on it because the neighborhood was a little worse than I was hoping. But, I'm sure glad I did!
@James Flowers I would not consider any of it luck! It was due dilligence, patience, a lot of reading, and a LOT of hard work. We gave up every free weekend we had and many sweaty late work nights (We didn't have A/C for the first couple months).
Wow good job. It looks amazing
Hey Congrats to you guys! Nothing feels better than walking to the closing table after wrapping up a flip especially the first one! The house came out beautiful.
Just curious but why did you go in and out of contract so many times? We've been lucky enough to only have one property fall out of contract the rest have all made it closing...Not to say there weren't any bumps along the way but very curious to hear why.
Thanks again for sharing.
@Thea Linkfield congrats, looks really nice and thanks for the radical honesty. It is both sobering and inspiring.
@Barrie Roesler bidding on the foreclosure auction is definitely a different type of process than normal buying. Here are some tips/information:
- The difference between the assessed value, the plaintiff max bid, and the final judgment amount.
Judgment amount: This is the amount that the person is being foreclosed for. So if it's a first mortgage being foreclosed on, say someone owed $100,000 left on a house plus $10,000 in interest/court fees, this will be $110,000.
Plaintiff Max Bid: This is the highest that the plaintiff (the plaintiff is the lender) needs to be able to walk away. USUALLY this is the same as the final judgment amount. So basically the first bid on said property needs to be at least like $100-200 more than the plaintiff max bid. If you're not willing to start your bidding there, then keep looking.
Assessed value: this is the county assessed value, so like what you'd find on your county website. For Duval it's coj.net. In my experience the assessed value is typically lower than actual market value, so it's just a good reference point. Market value should be calculated by you using Sold comps in the neighborhood.
- You want to know if you're bidding on the first mortgage or not. If you are not, you are basically bidding to pay off someone's debt for them, but not actually acquiring title.
- If the final judgment amount is like $2,000-$5,000 on a house assessed at $200,000... it's probably an HOA lien or some other secondary lien. A big giveaway for HOA liens is the plaintiff will be some sort of "association".
- 90% of auctions don't actually go to bid because of cancellation, bankruptcy, or whatever reason
- If you win an auction, you have to pay all cash and you have until the end of the business day to wire it over.
- You get the title within like 1 week if you were low bidder on a first mortgage
Congrats! Being able to do the work yourself is a definite plus!
@Sean Gribbons Once was a family emergency within 1 day of signing the contract, once was within 1 week of closing and was because she couldn't get the loan approved, and the last one was within 10 minutes of closing and was actually a long story:
We listed the house as on city sewer and it ended up being on septic tank. We literally had the house for a year and didn't realize this. We spent a whole day arguing with the city that there was no septic tank on the property because there was no evidence of one and there was a clean-out in front of the house in the location it would be if it was on city sewer. The only way I should have known is that the whole time we were paying for utilities, we weren't paying for sewer. SO CHECK YOUR UTILITY BILLS PEOPLE! Turns out the septic tank was in the front yard, and we didn't even notice it when we redid the sod. We ended up converting it to city sewer which ended up being an extra $3499 ($1275 for the conversion with the city and $2125 for a plumber to lay the new sewer pipe to the city and to decommission the septic tank and $100 for more sod). The buyers who found this out were willing to wait for the conversion at first, but eventually backed out because they thought we were being sketchy. I can't completely blame them, but it certainly sucked to have to go back on the market and wait for a whole new closing.
Congrats @Thea Linkfield ! When you say "we" I think is only natural for me to assume that you mean you and your significant other. If that is the case, then I can relate 100% with what you went through with your first flip. My wife and I just renovated 3 of our SFR's back to back, and the same as in your case, there was a LOT of cursing, arguing, disagreeing, etc. etc.. but at the end of the day we were very proud of what we accomplished. The same as you, we only contracted out some tile, granite and carpet, but we DIY everything else, and the same as you, we could only work evenings and weekends. It took us way too long doing it that way (an average of 1.25 months per unit), and we did have lost rents too. I haven't run the numbers yet, but I estimate that our actual savings (DIY vs. contracting the work minus lost rents) is still in the positive. However, I don't really feel the savings will be high enough to justify all the weekend time we put into it. The same as you, we learned a lot of new tricks along the way, but I don't think doing it that way is sustainable or scalable. We have been in buy/hold mode for some years, but are trying to get into flipping now, and the renovation we did on our rentals was actually a "test run" to get a feeling of the actual net costs/labor of rehabbing.
I appreciate very much that you shared your fist flip story, and hope you guys are getting ready for your next deal. Wish you the best of luck. Post more before/after pictures. I find that very motivating and inspiring.
"We" is my fiance, myself, and my dad. He was only boyfriend through most of the rehab, so I'm surprised he even ended up asking after all the fights ;)
My dad contributed about half of the total capital and he came up 3 weekends to help. My fiance and I did the rest of the work.
We did also contract out the granite countertops in the kitchen, but the cabinets, plumbing, flooring, drywall, lighting, paint, electrical, appliances, we did ourselves.
Here are some photos of us moving the front door spot. This was a crucial part of switching the whole layout of the house around because it allowed us to change what was the living room into the master bedroom and what was a third bedroom into the living room. This was the only way to do the open-concept because the wall separating the kitchen and the what was living room and what is now master bedroom was a concrete block wall. We were NOT going to take on taking down a concrete block wall. I was VERY nervous about switching the front door spot but it ended up being very easy because it turns out the "new" front door spot was already framed out because it appeared to be the original front door spot.
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