My first deal began in March of 2017 when I purchased my first ever home to live in. At the time, I knew I was going to buy a fixer upper and eventually sell and move on, a live in flip. The house is a 3 bed 1 bath tri-level just under 1,200 sqft with an over sized garage (2 cars wide with an extra 15 ft at the back for bench and tools. The purchase price of the home was $112,000.00 and it was very much an ugly place inside and out. Tire out all carpet and began installing flooring in the bedrooms and upstairs. Beyond paint and some flooring my now wife, step son and myself lived in this home for almost two years with a subfloor kitchen and dining room until we were ready. September of 2018 we took out a personal loan of $15,000 to finish the inside and redo the kitchen. Since I did all the work myself, we went high end cabinets and vinyl plank flooring with granite counter tops and probably kicked in an extra $3-5k out of pocket by the end of it all. This was the turning point when We started getting the feeling that we wanted to be in real estate as our primary job.
Fast forward 8 months into early May and we found a new house by chance that we put an offer in on and it was accepted, it was time to move on. We finished the final touches on our house and within 3 days had highest and best offer with the winning bid being $166k, which was $6k over asking. Within days we had the buyers had the inspection scheduled for that Saturday......on Thursday we hit our bump in the road. Our price reflected the fact that the furnace, ac, fascia boards, and gutters were all in dire need of replacement. With that being said we had a torrential downpour resulting in water seeping into our living room. Not a lot, but enough to have to fix. We did not go high end in the living room with flooring, it was cheap plank flooring, the kind that buckles when water hits it. We tore up the floor immediately and dried everything, even the flooring survived. After fixing the pitch of the ground around the house, paying $1,500 to get all the rotten fascia replaced and new gutters put up all around the house, we still lost our first buyers. Now, if any of you have read David Greene’s book on Brrrr investing, you know that he says it is crucial to have a rock star roster. Our agent was exactly that and we were back under contract with buyers that knew about the water and the repairs to fix the issue. The rest of the story is very typical with inspection, appraisal and the eventual day that we closed on the home.
I write this post 4 days after signing the paperwork and am glad we are finally done with this deal and are ready to move on to the next chapter. We have learned so much with this live in flip and the experience will serve as crucial hands on experience budgeting, estimating repairs and dealing with the unexpected bumps in the road. I have not tallied the total numbers yet because we immediately left for vacation but can estimate after paying off the house, kitchen loan and all the agent and closing fees, we made a profit of around $24k.
Our plan now is to start the Brrrr strategy as soon as the dust settles with the move into the new house. The funding will likely come from investors or hard money and to be honest is a little scary. I am spending my time now learning how to analyze deals and finishing the Brrrr investing book. Let me know what you guys think.
Title probably should have said “live in flip” instead of house hack.