Project Stockton - Our First Flip!

14 Replies

Hello BP!

On Wednesday, we went to settlement and closed on our first deal!  I wanted to go ahead and document our project with a diary thread from start to finish.

A little background - this house was an REO home listed on MLS. We (my husband and I) partnered with another investor here at BP with similar goals - @Vaughn Lewis  .  We (the three of us) walked the house several times before deciding on a max purchase price - then we waited.  The day before Christmas Eve, I got an MLS alert that the price had dropped.  I placed a bid and got a counter - that was 2k lower than our MPP.  We received the notice of accepted contract on Christmas Eve.  

Here are our rough (and a few actual) numbers for your nerdy REI pleasure. :)

Purchase price:  33.8K
Closing costs (and inspections, taxes and insurance through June) 4.2k
Estimated rehab costs:  52k  (several GC quotes ranging from 40k - 55k)
ARV: 130k (although comps support 140-145k, would rent for 1k)
Selling costs:  11k

It's an all cash deal that we will hopefully be all in for 90k.  With margins this wide, we felt like we could make alot of errors and still come out ahead and with newfound experience.

The house is a two story, A frame style house built in 1930.  The plumbing and electric has all been updated in the last 10 years.  The roof is new.  It's on a small lot on a quiet street in a C+ neighborhood, just outside of the "town center" and down the street from a good high school.

We have a very detailed SOW but I'll just give you the highlights..  we plan to install a new HVAC system with duct work, address a few minor plumbing issues, take out 1.5 walls to open up the floor plan downstairs, move the bathroom 3 feet (detailed below) flooring paint and new siding.  Pictures below..

Looking forward to sharing our experience and you can guarantee we will be turning to BP for guidance here and there! :)  Stay tuned!

Exterior - put up vinyl siding, take out the attic window, repair porch, landscape

Going to remove that wall (it's non load bearing) and expose the brick under the paint on that column for a nice focal point

Removing the upper cabinets and half of the wall to have a place for a breakfast bar in the new kitchen

New layout downstairs

Need to move this bathroom several feet to the right, and create a hallway where the shower is.  The floor plan is below.  The reason for this is so to provide direct access to a third bedroom (effectively going from 2 bedroom currently to 3 bedroom) and making room for a tub (desperately needed)

And a few more just because...

Demo starts tomorrow!  :)

Thanks everyone!  We are nervous, but confident and feel prepared :)

Originally posted by @Patrick Martinez:

Hi @Heather Jones. Congratulations on your deal! Is this flip in MD?

@Patrick Martinez It IS in MD..  Up in "Ceciltucky" (if you're familiar with MD) near the MD/DE line :)

Well - demo went pretty smoothly this weekend.  We have our encountered first absolutely unexpected cost - YAY!  

Took the two first floor walls down to studs in preparation for our carpenter to put up support beams and remove the framing.  When we exposed the first side of the chimney brick we see that its in really bad shape.  (I don't know why it never occurred to me that the brick under the plaster / wall would be deteriorated.  Duh!  Newbie oversight!)

Yikes.  The old mortar is yellowed and comes out with no effort whatsoever.  I think we'll have to get the entire thing repointed. I understand this could be an easy but time consuming task for an experienced mason.

Any one want to chime in with any suggestions or their own experiences?

This project has taken FOREVER but we are finally done (and under contract after only 10 days on market - YAY!!!!)

I will probably write a long blog post once we close with numbers and the lessons we learned but I did want to share some before/afters on here :)  Tried to take photos from the same angle as the original listing photos.  More photos available on the Zillow listing :)

Exterior

Family Room

Originally this bathroom contained only a shower and the 2nd bedroom was a pass thru to the third.  We knocked out the shower and built a hallway and private entrance to the third bedroom and took some space away from the middle bedroom so we could incorporate a full tub and market it as a 3 bedroom now instead of a 2.

Originally posted by Sam & Heather Jones:

This project has taken FOREVER but we are finally done (and under contract after only 10 days on market - YAY!!!!)

I will probably write a long blog post once we close with numbers and the lessons we learned but I did want to share some before/afters on here :)  Tried to take photos from the same angle as the original listing photos.  More photos available on the Zillow listing :)

Exterior

Family Room

Originally this bathroom contained only a shower and the 2nd bedroom was a pass thru to the third.  We knocked out the shower and built a hallway and private entrance to the third bedroom and took some space away from the middle bedroom so we could incorporate a full tub and market it as a 3 bedroom now instead of a 2.

 Outstanding work!! How did you make out?

We finally closed on this house.  A successful first project!

Purchase price:  $33,830.86

Acquisition costs (taxes, insurance, inspections, title fees, etc):  $4282.57

Holding costs:  $2194.18

Rehab costs:  $54,404.23

Total invested:  $94,711.84

Sales price:  $129,900.00

Buyer subsidy:  $7665.03

Sellers closing cost:  $8151.95  

Total return:  $114,083.02  (plus $1795.86 commission return because I'm licensed)

Profit:  $19,371.18 ($21,113.04 if you count the commission return)

Not too bad for our first time, and the knowledge we have gained and contacts we have made are worth their weight in gold :)

Sam & Heather Jones Nice results, financially and aesthetically. You have made a great improvement in that home and neighborhood. I hope you have many more success stories. Persevere! 

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