I'm going to use this thread to track the progress of my current flip project. This house is in the Hickory NC area. The house was an REO listed in the MLS. It is a split level ranch with 3 bedrooms 1.5 baths and a full basement that is partially finished.
Purchase price: $41k
Rehab/Holding cost estimate: $15k
I"m shooting for a profit of $15-20k. This is on the lower end of my desired profit margin on a flip, but it is actually the first one I've done where I am not doing any of the work. I'm willing to take a smaller return if I'm not swinging any hammers. We will see how it works out.
can't wait to see the end$ result. Keep us posted.
What's your time frame on this rehab? How many square feet?
I'm hoping for a 60 day rehab, but we are currently about 40 days in and its looking like we are going to go over on the timeline. Imagine that :)
This property is about 2.5 hours away from me, so it drives me crazy not being able to go and just get stuff done. The contractor has rehabbed 2 other houses for me and they pretty much stayed on budget and finished on time, so we will see.
Oh, and its a tad over 1,000sf on the main floor and there is maybe about 500sf finished in the basement.
looks very Birminghamish IE stuff I fund in B ham lots of day lights and topo as opposed to flat lots.
15 to 20k per flip is a nice pay day... we all want to make more but that money spends. its 5 years of Positive cash flow on the slow drip buy and hold model and sometimes ten years.
I agree, $15-20k is a fine pay day, and it does beat the pants off of my "slow drip" rentals. I am so torn right now on how to move forward with my investing. I love doing flips, in fact it is a passion. But flippers crash and burn when the market tanks. I am trying to build my rental portfolio (currently at 13 doors), but I really don't like rentals. I just do it because it seems like the logical way to build wealth and protect myself from market down turns. It seems to compliment flipping well.
I'd love to get into doing some spec builds like you are doing, but I'm hesitant to jump head first into something I'm not as familiar with. I need to ease my way into that I think.
I think we have another 18 to 24 months of pretty clear sailing IE interest rates stay were they are.. the nice thing about new construction is your dealing with the top end of the food chain as opposed to those that are credit challenged etc etc. So when you do get a buyer you get a 30 or 45 day escrow no funny business no mad dash to clear credit and clear to close .. the deals just go together very easily.. I find it much easier to sell a 350k home than a 100k or sub 100 k because the buyer is TRULY qualified as opposed to putting a round peg in the square lending hole of the low end.. If that make sense. You would think all these folks renting would be buying but they just can't get there SH together and their credit issues.
Hey Austin. That looks like the type of house I'm looking for to do first. My financing should be in place in about 3-4 weeks. What are you going to do to that house? Where is it?
The house is in Newton close to the courthouse. It is pretty much a cosmetic rehab. New flooring, paint inside and out, refinish kitchen cabinets, new countertops, new appliances, new lighting, new bathroom fixtures, etc.
We did have to upgrade the panel to 200 amp and have the heat pump serviced and repaired, but everything else was in good shape, just outdated.
There is a house just like it available just up the road. Let me know if you are interested and I'll give you the contact info for the seller.
It's amazing there are lots of areas around the country still have properties at very low price. I'm having hard time finding fixers in my area for around $300 (for 3/2, ~ 1100 sqft). :)
Good luck Austin. And what you plan to do with the $15k rehab please?
"You would think all these folks renting would be buying but they just can't get there SH together and their credit issues."
I agree, for the most part...but I will say that part (a BIG part) of the problem is that credit chases you around for longer than the market stays stable. People like myself, who took a huge hit, either financially (ours was financial...having to take out a large 5-figure "deficiency" loan to unload our east coast house that we couldn't even rent for a decent amount) or with credit, during the downturn are just now starting to dig out from the carnage. A lot of good, stable, hardworking people got taken out or (in our case) knocked WAY back down the ladder through the actions of Wall Street and the housing crisis and because of the way credit works, with its decade-long penalties, even if you just had one big crisis,and got back to work/repayment, those people won't realistically be able to re-enter home ownership for another 3-5 years. Add in the ridiculously tough credit requirements for new mortgages now....and the competition from investors like us...
My financing should be in place in about 4 weeks. Hopefully the offers will be rolling in on yours which will make that one really attractive!
Fantastic :-) Hey I would be interested in the other property if we can also use your contractor! Yes I know, we ask too much, just thought I'd be cheeky. I look forward to seeing how this goes though.
I was in town yesterday to check progress and to buy supplies. I somehow managed to lose ALL of the progress pictures I took, so forgive me for that. I will ask my contractor to send some so I can post them.
Progress is slow, but we are moving forward. We are hoping to be done in about 3 weeks. So, the timeline is shot, but I can live with that for now.
I did get good news from another investor in the area. He informed me a house in the same neighborhood appraised for $95,000. I don't know the specifics of the house, but they are all very similar in size and look, so it can't be too much bigger. I'm hoping for a resell of about $80-85k, so that was good news.
I'll try to post some progress pics as soon as I get them.
Here are a few "during" pics:
Kitchen floor getting laminate:
Walls/Ceilings/Trim painted (still need to paint doors white):
As you can see, we are moving slow. Hopefully we are about to turn the corner and wrap this thing up.
Well, here we are going on 3 months and this flip just won't end! My contractor (who is also my property manager) has been incredibly distracted and is having a hard time finding the time to get the job done. I really hope to have it wrapped up and on the market by the end of the year, so we will see. Things are going so slow, I have decided not to add a 2nd bathroom like I had hoped to. This will hurt my ARV and probably bring my asking price down to around $79k, but I just want to get it done and move on to the next one.
I am going to go by on Friday, so I'll snap a few pics to show the progress.
Thanks for the update, was curious what's been happening! Sorry to hear it's so far off schedule.
Keep us posted!
Hello @Austin Lee What is the Wall color you are using there?
I think it is time for a new contractor. His/her distractions shouldn't become your monetary losses.
I can't say I disagree, but I feel a bit of loyalty towards this guy. He has been my property manager for several years and has helped me out a great deal. I am going to try to weather this one and hope things get back to normal. If not, then it will probably be time for a change. I hope it doesn't come to that.
I am not sure of the color off the top of my head. It was from Lowe's, but I can't remember the name. I will see if I can find the label and I'll let you know.
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