My First Flip! With Numbers and Photos!

370 Replies

I realize I do not have a ton of posts here on Bigger Pockets, but I can’t emphasize enough the impact BP has had on me in a short time.  In the interest of community and sharing success stories with others that might be looking for some motivation, I wanted to detail my start in RE.  I’ll try not to be too lengthy, but I think people can identify with these stories a little better when there is some personal context.

My name is Ben Ervin and I am a Program Analyst for the Naval Education and Training Command in Pensacola, FL.  I enjoy knowing what I do is impactful and supports the Sailors that serve our country.  But, I have always had an attraction to the idea of entrepreneurship.  I’ve known since I was 13 years old that I wanted to be my own boss one day.  Yesterday marked a big step towards that goal when my wife and I listed our first flip property on the market.

In October of 2017 I decided to stop thinking about flipping houses and start educating myself on how to get in the game.  I found that a friend of mine, @Nick Armstrong, was flipping houses and got a chance to talk shop with him a bit and he directed me here to BP.  From that point, it took me 4 months to close on our first deal.  It hasn’t sold yet, but we are in a hot market right now where I believe data supports a high demand for the product we are offering.  Beyond all of that, the really invaluable part of this experience has been education.  I have learned A TON.  We certainly made mistakes along the way, but I can take those lessons learned and leverage them going forward.  I intend to use this first deal as a launching pad to doing more deals, including additional flips in the near term with the goal of building a rental portfolio for long term passive income.

Now I will stop rambling and show you what we’ve done.  The house has not sold yet, but assuming full price offer, here is the breakdown by the numbers along with (everyone’s favorite part) photos.

Projected Numbers:

Acquisition Costs (AC): $70,635.50

- Purchase Price: $70,000

- Closing Costs: $510

- Termite Letter: $125

Rehab Costs (RC): $41,185

- Materials: $21,780

- Labor: $19,405

Holding Costs (HC): $870

- Utilities: $450

- Insurance: $420

Selling Costs (HC) *Assuming Sales Price (SP) of $175k*: $10,500

- Commissions to Agents: $10,500

Projected Profit: $51,810 – Taxes & Any Additional Selling Costs

- $175,000(SP) - $10,500(SC) - $870(HC) - $41,185(RC) - $70,635(AC) = $51,810

Now on to the photos...

Exterior Before:

Exterior After:

Interior Before:

Interior After:

I still have a ton to learn, but I look forward to trying to answer any questions you might have. Furthermore, if anyone here in my local market wants to just say hello, I invite you to do so. I hope to be more involved in the BP and larger REI community as a whole going forward.

Thanks for listening/checking out my progress so far and good luck to all!

Originally posted by @William Allen :

You did a great job, congrats!

Thanks, Bill.  Still a long way to go to compete with the big boys like yourself in the Pensacola market, though.  I am actively looking for more deals, so I'll be on the lookout for anything you are trying to move. 

@James Masotti and @Jeremy VanDelinder , My wife and I did a good bit of the work ourselves and contracted out some things that we weren't as comfortable doing (wall removal, electrical, plumbing, etc.).  I am not sure of contractor costs in NJ relative to prices here in the SE, but I would venture to guess they are probably lower here in most cases.

The floors are laminate, but a good quality.  I used to manage a Lumber Liquidators, so I was able to develop some relationships across a few different trades/material retailers that have helped us with some cost avoidance.  We also found some great help in a carpenter who's been fair to us on price.  My expectation is that we will contract out more work  next time to focus on greater speed and higher volume.

In terms of the scope, this was a total gut job cosmetically and also included  some electrical upgrades, plumbing work and a new A/C Unit.

@Jeremy England , sure, we found the deal off MLS. It was an REO that had already fallen out of contract once by the time we got to it. We won the bid with a little higher offer than a few other investors, a higher than requested Earnest Money Offer and Proof of Funds. We thought this might strengthen our offer a bit.

We did pay cash for it.  In my market, cash is king and those trying to acquire fixer uppers with financing are quickly pushed aside.

Originally posted by @Jeremy VanDelinder :

I have a house in Pensacola (that I will probably sell soon), so I had some idea of what those numbers run, but I still think you did well on the budget--good job! 

 Thank you and good luck, right now seems to be a pretty good time to sell. 

This post has been removed.

@Benjamin Ervin awesome remodel!

Just curious - what do you think your profit would have been if you financed the property and had the work 100% contracted out?  It looks like most of your profit is coming from you doing a lot of the work and paying cash.  

Originally posted by @Account Closed :


You and your wife did an INCREDIBLE job! Congratulations! I love the front door area, and the house looks absolutely stunning. You both have a great eye.

Wish you were around the San Diego area so I could bring you your next flip!

Best of luck on the sale!


Thank you, Paisley.  I wish I could take credit for the design, but my wife is the real hero there.  She has great eye for this stuff and is really an interior designer at heart. 

Originally posted by @Tyler Work :

@Benjamin Ervin awesome remodel!

Just curious - what do you think your profit would have been if you financed the property and had the work 100% contracted out?  It looks like most of your profit is coming from you doing a lot of the work and paying cash.  

Tyler, thanks.  Frankly, financing is not much of an option in my market.  Most homes  I am looking at would not pass lender requirements.  Furthermore, most of these houses end up in multiple offer situations requiring cash only.  Either way, I don't think it is too prohibitive to have the funds tied up for just a couple of months.

With respect to the contracting piece, I would like to start outsourcing more going forward.  I would be happy to shave some profit in favor of streamlining our processes and generating higher revenue through volume.  But, I really thought it was smart in our situation to cut our teeth with some of the renovations that weren't too big to handle.  I learned a tremendous amount about the rehab process and I now have a much better understanding of what exactly it is I am paying for. 

Originally posted by @Jon Crosby :

Excellent work @Benjamin Ervin! I like your future strategy as well, maybe even throw some BRRRR's in there as well to keep building your portfolio! Look forward to seeing what you do next, be sure to keep us posted!


Jon, thanks! I fully intend to use the BRRRR strategy in the future. It doesn't differ all that much from a flip in terms of process. Right now our focus has been primarily on flipping to generate revenue until we can access other funding streams.

Nice work, congrats! The place looks very clean and professionally done. 

The budget is very impressive for electrical, plumbing, floors, painting, cabinets, baths, tile, windows, and exterior work. Keep your workers.

Your cost in utilities is great too, I noticed I burned a several hundred dollars  in electricity and heating in Chicago, power tools use a lot of juice. 

Looking at the insurance, I assume this took you 3/4 months. Did you pull permits?

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