First time Post—Losing Money House Flip
Hey everyone. My name is Mike and I'm currently at the tail end of my first flip. I'm 31 and just started my REI business in the Hudson valley NY. A lot of things happened to bring me to this point but long story short
I used to be a PM for a huge plumbing company in NYC. Did 300-500 unit building last new construction and stuff like that. So obviously I’m doing all the work myself.
The numbers when we bought sucked. It was not the 70% rule but I convinced myself the house was in such good shape that the surface rehab would make it a fast flip.
Instead I gutted everything did walk in showers 2–1/2 new bathrooms and a 15k kitchen with cabinets I made between offer and closing.
im 90 days in and when calculating everything into the cost of the rehab/buying/selling My break even today as of this moment is 690k. I can sell the house for 7-730 maybe a little higher if I get lucky. Breakdown went like this:
House 550k
Closing costs 19k
Rehab materials only (no labor)-55k
Selling costs: between 40-50k
Holding costs—18k
total between—685-700k
I made a ton of mistakes along the way and overdid the rehab because I wanted to prove that I could do it. The house is beautiful. I have no worry that it won’t sell. The neighborhood is amazing and the comps have been getting better. I’ve learned a lot through the process and now I know what no to do in the future. Our next plan is to do BRRrRrRrRr…I don’t think I’m going to flip as much as I intended.
FINALLY the question arrives…I have a friend who is also a GC and can bring 4 guys total to do finish carpentry, close out fixture work, punch list bathroom work, painting and refinishing my hardwood floors. The cost is 9k for 12 days. I’ve know. Him for years and he’s very good. He’s always helped me push through the tail end of projects before. Should I extend the budget another 10k?? Is it worth the risk? My realtor tells me the September market is really hot and it dies down afterward. I can’t really afford holding the property for another 2 months.
My purpose with this project wasn’t to make a killing. It was to make minimal moneys or break even so we can put the first one on the books. Hopefully get better financing for the next project.
If I took my current break even from 690k and brought it to 700k with a comp (1 less bedroom too, but literally down the block from my property) that just sold for 725k and is totally original, would I be justified in paying for a quicker way to sell the house. The difference would be putting on mls September 1/2/3 or September 20/21/22…is the 10k worth it?
I’ve accepted that I’m not getting paid and money for the work I did. And I’m okay with that. It sounds crazy but I am. I just want to sell this and if I take a 5-10k hit it’s ok. I’m still moving onto the next property. Def a multi family. But what does everyone think I should do now?