First Home Flip Ready!

Buying & Selling Real Estate
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First Home Flip Ready!

Phil Leighton
Investor · Halifax, Canada · Member since 2019 · 11 posts · 18 votes

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $212,000
Cash invested: $13,000
Sale price: $275,000

First flip bought in May of 2018, this was a lived in flip and went slow. Did as much work as I could learning from YouTube and hiring out for the bigger jobs like taking down a load bearing wall. About to put up for sale, on track to make a decent profit.

What made you interested in investing in this type of deal?

Was ready to purchase my first home but knew a rehab was a good idea. I first saw this house and it was so ugly that I was immediately turned off. After looking at several others, it stuck in my head for the size, area, and the bones of the house were good. I knew there was a lot of little things that could be done to make it look great. Didn't really know what I was getting into but it all has worked out (so far).

How did you find this deal and how did you negotiate it?

Found on MLS and used a realtor. Didn't have a great experience with the realtor but loving the one I'm currently working with now.

How did you finance this deal?

Traditional and received a purchase plus loan to assist me with some of the rehab costs.

How did you add value to the deal?

Rehabbed everything that I could myself, got help from some family and friends with the labor. Hired out for a load bearing wall to open up the kitchen/living room.

What was the outcome?

Outcome has been great but still have to sell. Not putting it on MLS just yet as I'm still looking around for deals.

Lessons learned? Challenges?

My next project I will approach with much more organization. Went into this flip sort of winging it and tried to deal with problems as they came up, and tried to do most rehab jobs to save money. It was cheaper but took longer. I have a much better idea now on what to hire out for and hope to find contractors that I can trust and continue working with.

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Account Closed
Member since 2019 · 2 posts · 5 votes
7y

Great Job Phil, you just reminded me of the "Head-First" series.

Quick questions in your analysis?

Did you factor in the cost/profit of holding/living in the property for 10 months? - mortgage, utilities, etc.

Was living in the property more financially rewarding than renting someplace else.

5Reply
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  • Account Closed
    Member since 2019 · 2 posts · 5 votes
    7y

    Great Job Phil, you just reminded me of the "Head-First" series.

    Quick questions in your analysis?

    Did you factor in the cost/profit of holding/living in the property for 10 months? - mortgage, utilities, etc.

    Was living in the property more financially rewarding than renting someplace else.

    5Reply
  • Jacob Kenneally
    Rental Property Investor · Virginia Beach, VA · Member since 2019 · 16 posts · 9 votes
    7y

    In the process of looking for a live in flip now, hopefully I can achieve a similar result here in south east Virginia! What do you think the biggest thing you encountered that you did not see coming?

    3Reply
  • Phil Leighton
    OP
    Investor · Halifax, Canada · Member since 2019 · 11 posts · 18 votes
    7y

    @Account Closed- Funny enough there wasn't a ton of analysis involved. After we did the inspection it was determined that the house was in pretty good shape overall and most of the rehab was cosmetic. There is also a detached garage with an unfinished loft above which made it more dynamic so my analysis was really just knowing we could at least get 260k ARV. Didn't have to pay for two places so yes, that helped with the costs.

    2Reply
  • Phil Leighton
    OP
    Investor · Halifax, Canada · Member since 2019 · 11 posts · 18 votes
    7y

    @Jacob Kenneally- There were a ton of things that came up during the rehab.  Some of them were projects where we decided 'ok, we should do this instead', or 'we should add potlights to the kitchen', or instead of repairing the front deck completely replacing it because all of the wood was rotted.  We refinished the upstairs floors as they were painted, thought this would be fairly quick (It was not, the floors were uneven which made sanding them extremely difficult).  So to answer your question, I think it depends on the property, but plan for the worst because it WILL happen!

    0Reply
  • Account Closed
    Member since 2019 · 2 posts · 5 votes
    7y

    @Phil Leighton, That's awesome.

    0Reply
  • David Breitigam
    Rental Property Investor · Sylvania, OH · Member since 2019 · 11 posts · 7 votes
    7y

    Why not live in it for two years to avoid taxes and sell yourself and avoid realtor commission.  Leaving money on the table...

    2Reply
  • Niko L.
    Rental Property Investor · Salinas, CA · Member since 2017 · 9 posts · 1 vote
    7y

    Congrats. I have a question. You made $50k; however, you did not disclose how much you spent on other fees spent such as realtor fees, interest while paying mortgage, etc. 

    0Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    Actually, I don't think he has made any money yet. He's predicting a profit on the sale but it hasn't taken place yet.

    Is there any value in building out the bonus room above the garage? ie, highest/best use of that space.

    Since you're living there, if it extended your stay a bit longer that shouldn't be a big deal if you could make the profit even larger.

    1Reply
  • Lynda Hart
    Investor · Vacaville, CA · Member since 2016 · 2 posts · 1 vote
    7y

    It looks like there needs to be a 4 ft stair railing to be up to building code. Good start in the flipping business. 

    1Reply
  • Liam Fitzpatrick
    Member since 2019 · 1 post · 1 vote
    7y

    Great job. Hope you get your sales price!

    1Reply
  • Bryan MitchellPro Member
    Rental Property Investor · Columbus, GA · Member since 2016 · 623 posts · 337 votes
    7y

    I’m also doing a live in flip just south of Atlanta. We’ll put on the market next summer. Since we’ll live for the last two years, no capital gains taxes! 

    2Reply
  • Kyle Milligan
    Member since 2018 · 8 posts · 1 vote
    7y

    @Bryan Mitchell Good luck to you - I hear Columbus is a great market. I'm a little further down 85 (Montgomery). 

    Hope you fill us in on how it goes.

    1Reply
  • Bryan MitchellPro Member
    Rental Property Investor · Columbus, GA · Member since 2016 · 623 posts · 337 votes
    7y

    Kyle, Roger that! I’m trying to close on a property in Salem just between Columbus and Oplelika/ Auburn. I hear Montgomery is a good place to invest. I’ve been back and forth from Columbus to Birmingham to Montgomery and so on. Basically, I traveled the entire eastern Alabama. 

    0Reply
  • Jaymes Davidson
    Newport News, VA · Member since 2018 · 9 posts · 4 votes
    7y

    Do you have any idea on what your REI is going to be after all closing cost are paid

    0Reply
  • Alexandra King
    Real Estate Agent · Santa Barbara, CA · Member since 2013 · 49 posts · 14 votes
    7y

    So cool...wish we had property that cheap in Santa Barbara. The lowest cost dump is around $800,000.00 LOL - congratulations! ~ Laurie Alexander, Realtor, Keller Williams, Santa Barbara

    1Reply
  • Raushanah MorganPro Member
    Real Estate Agent · Memphis, TN · Member since 2018 · 10 posts · 3 votes
    7y

    Great job! I want to get into the Fix & flip business as my entry way into RE investing. Can you further explain not putting your property on MLS so you can find deals"? Do you mean that you're searching for cash buyers vs traditional mortgage payers?

    1Reply
  • Account Closed
    Real Estate Agent · Celebration, FL · Member since 2019 · 2 posts · 0 votes
    7y

    @Phil Leighton

    0Reply
  • Jay Kadlec
    Grand Rapids, MI · Member since 2017 · 64 posts · 23 votes
    7y

    Recommend holding for 2 years if possible while having as primary residence. That way when you sell you pay $0 taxes (not deferring but eliminating)! Been doing my own live-and-flip as well, same naivety got me in but going well so far. Best wishes when you go to sell!

    2Reply
  • Phil Leighton
    OP
    Investor · Halifax, Canada · Member since 2019 · 11 posts · 18 votes
    7y

    Didn't expect this many responses and suggestions! Thank you.  Also, am I noticing some fake accounts on here?...

    @John Teachout- Correct, still haven't sold. The room above the garage is a good space.  I'm at the point where I don't want to over improve for the area, and was advised by my realtor to keep that as is for now.  The hold for another year is something I'm considering, my concern being if I rent it out then I wouldn't be much cash flow if any at all and still currently looking into how to acquire another property with financing if I do so.  Meeting with a broker next week, open to any advice!

    @Raushanah Morgan- Not putting on MLS right now because I have a few other things to figure out including financing for my next property. I worked with a credit union and it didn't have an amazing experience, so want to get my other ducks in a row first before I put it up.
    @Jay Kadlec- Thanks for the advice, you're more patient than me. I'm eager to get another one to flip or BRRR.

    2Reply
  • Jay Kadlec
    Grand Rapids, MI · Member since 2017 · 64 posts · 23 votes
    7y

    Haha, it's less patience and more necessity with job move plus baby birth and now having another one on the way. #lifehappens

    1Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    7y

    Where is this home located? In Halifax? If so, some of the advice you're receiving may or may not apply regarding tax avoidance, etc as I'm not sure of what Canadian laws are vs ours here in USA.

    1Reply
  • Trevor Gaal
    Rental Property Investor · Halifax, NS · Member since 2018 · 55 posts · 103 votes
    7y

    Hey Phil, 

    Great work!

    You should talk to either Leanne Myles or Igor Geshelin for your financing needs. They’re the best mortgage brokers in the city. They’re on different teams, so you should set up appointments with both of them and see who you feel the most comfortable with. 

    Advice when talking to a broker... you should lay everything out on the table so they can paint the best picture before your info goes to the lender. That’s what they’re there to do for you. If you go directly to a lender you can shoot yourself in the foot and kill a deal pretty quickly.

    These guys both understand how to position you in the best way to keep qualifying for financing. Inexperienced brokers can get you backed into a corner where the lenders will start shutting you down after a certain point.

    Good luck! And keep us all updated on how things are progressing!

    Cheers,

    Trevor :)

    3Reply
  • Phil Leighton
    OP
    Investor · Halifax, Canada · Member since 2019 · 11 posts · 18 votes
    7y

    @Trevor Gaal- Thanks for the info. I was actually going to shoot you a message, I'm meeting with Igor this week because I saw you recommended him in a previous post and so did my realtor. Looking forward to talking more with you! Maybe at the next REI meetup?

    @John Teachout Yes this is in Nova Scotia, Canada. 

    1Reply
  • Trevor Gaal
    Rental Property Investor · Halifax, NS · Member since 2018 · 55 posts · 103 votes
    7y

    Good stuff @Phil Leighton. Send me a DM when you get a chance, we can take further conversation off the forum.

    T :)

    0Reply
  • Gina SternPro Member
    Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes
    7y

    Lookin great keep up the good work. 

    [email protected]561-430-2616
    0Reply
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