Flipping in Illinois has its pros and cons. Cheap market, but the fees/additional soft expenses drive me crazy, and you always see them at the VERY END!
I have flipped 25+ single family homes right outside of St. Louis on the Illinois side of the Mississippi. All is going well, the market is great and turn around time is great, new hospitals and an Air Force base are key. Everything is gravy, expect I've been stuck with this gross profit of 25-30k on every house. Don't get me wrong, life is good , love doing this full time. However, even after being in the game for 5+ years and cutting down costs a lot, for example there is a "Home Depot" warehouse 2 hours away, everything is 50 percent off store price, if not negotiable). That saves several thousands. BUT STILL , after several years I just want a huge winner. You would think after 25 times up to the plate, I would hit at least one triple or out of the park. Guess doubles are good too
But heres the issue, every time I find a new property, get it, start demo, do the numbers, I tend to say "this will be my highest margins yet" ....... then the closing costs come and Im furious.
Here are set numbers for my most recent sale
purchase price - 105,000
rehab - 28,000
under contract at 178,000
nearly 12,000 in fees.
4600 Tax credits
1260 title insurance
270. Transfer stamps
800. Recording fees
4500 buyers agent commissions
probably more I am forgetting to write down ...
is there anyway to lower my closing costs ? or is this just how the cookie crumbles ???????? is Illinois just one of those states that hassles everything?
@Alex Young - those are pretty standard in any state. You will always pay taxes, title, commissions. The only thing that s state specific is transfer stamps, and most states have those too
@Alex Young , $800 for recording fees looks too high. In cook county, it’s $52 to record the deed and about 80 bucks to record a mortgage, which will really just depends on the number of pages being recorded. Title companies will tack on some unnecessary fees here and there, mainly in endorsements that you don’t need. For example if you’re buying a single-family home and there’s a survey, you don’t need a location endorsement. Never pay for an inflation endorsement either, its a waste of money
Lol well I would like to know which title company your using to close? Also do you factor in those closing and holding cost when your flipping? that actually kills a lot of ROI percentage when I'm doing the numbers for a fix and flip. Also depends if your realtor charges you the full 4,5, 6 or 7 percent commission as well. Add in the taxes that you pay for holding it, title company fees and I always add in a cost of miscellaneous ranging from 1-2k and those are holding cost. 12k in fees for a 180k is a bit high. You might want to ask your realtor a "favor" sincerely your doing volume.
Buy more expensive projects, get bigger profits. The higher the risk the higher the reward. Sounds like you're doing well to me.
We should talk. I am in Belleville. My contact info is below.
@Elbert D. I estimate closing and holding but the percentage of takeaway always surprises me ... I go through "community title" in local area. Realtor is already on the team... just looking for ways to squeeze little more juice out of every flip. Has to be a way to retain another 3-5% roi that I am missing
@George Skidis anytime
Elbert, far and away the lowest title fees I found were with Entitle Direct, order online cuts out middlemen.
$800- sounds insane for recording fees, doubt the counties were that high, a padded bill?