First Flip - Analysis and questions

Alan F.

Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes

1y

Quote from @Vivan Bhalla:

Hi BP community,

I got into a flip project last year in September 2024, the numbers were as follows

Zipcode - 19145 (Point Breeze)

Purchase Price - 150000$

Purchase cost - 127500$

ARV - 399k (currently listed for 375k)

There are a few learnings/mistakes that happened during the course of it:

1. Our contractor was supposed to finish the job April 1 2025 but instead he finished late June. There were many reasons (all contractor based) which resulted in this delay and he kept us in dark about them for too long, there were periods where he would just not reply and the contract we signed mentioned the completion date as April 1 2025. Is there anything we can do legally? This delay has cost us a lot in monthly interest as well as loan extension costs. We would like to get the money from the contractor but want to know our legal rights

2. The house initially got a lot of attraction but since the last 2 weeks there has been no showings. This was after we reduced the price by 5k. Is the housing market in general down or is there anything we should do to get this sold quickly?

This was our first flip and there was a lot of learnings. At this time we would like to move from it and start a new one with our learnings. Would appreciate some advice from peers here

Thanks

1. Depends what is written in your contract, that's why you have contract. Contractor license law in your area will also be applicable.

2. A house will only sell for what someone is willing to pay. Typically it's overpriced. What is your competition selling for? As far as a slowdown, what's the average DOM in your market?

0 Reply

Doug SmithPro Member

Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes

1y

This happens a lot and is one reason lenders are hesitant to do flip deals for newer investors. That being said, it's happened to me...many times. You get into a deal and, for some reason, the property doesn't move. When this happens, we set a date if by which it doesn't sell, we put a tenant in there for a year. You can finance it with a DSCR loan using the value as opposed to your purchase price/cost after you've owned it for 6 months, so you're well past that. You can collect your rent and wait for another, better market. Every time we've done that, we've actually made more money. It's not the end of the world.

3 Reply

Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
1y
Quote from @Doug Smith:

This happens a lot and is one reason lenders are hesitant to do flip deals for newer investors. That being said, it's happened to me...many times. You get into a deal and, for some reason, the property doesn't move. When this happens, we set a date if by which it doesn't sell, we put a tenant in there for a year. You can finance it with a DSCR loan using the value as opposed to your purchase price/cost after you've owned it for 6 months, so you're well past that. You can collect your rent and wait for another, better market. Every time we've done that, we've actually made more money. It's not the end of the world.

Doug, I'm pretty sure we're going to be in the same camp. We're 3/4 through a remodel, but I'm seeing more DOM and slightly lower prices. Profit as a flip could be slim. We're not interested in making $7k (net) for all this work. Hopefully some nicer SF houses (comps to ours) sell and boost the ARV. Can't control the market though. If not we will rent, leverage a DSCR loan, and play the long game like you mentioned.
0 Reply
Doug SmithPro Member
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
1y
Quote from @Jaron Walling:

Quote from @Doug Smith:

This happens a lot and is one reason lenders are hesitant to do flip deals for newer investors. That being said, it's happened to me...many times. You get into a deal and, for some reason, the property doesn't move. When this happens, we set a date if by which it doesn't sell, we put a tenant in there for a year. You can finance it with a DSCR loan using the value as opposed to your purchase price/cost after you've owned it for 6 months, so you're well past that. You can collect your rent and wait for another, better market. Every time we've done that, we've actually made more money. It's not the end of the world.

Doug, I'm pretty sure we're going to be in the same camp. We're 3/4 through a remodel, but I'm seeing more DOM and slightly lower prices. Profit as a flip could be slim. We're not interested in making $7k (net) for all this work. Hopefully some nicer SF houses (comps to ours) sell and boost the ARV. Can't control the market though. If not we will rent, leverage a DSCR loan, and play the long game like you mentioned.

I miss Indy. I lived there when I worked for Bank One in 1995 on the North Side. Rates on DSCRs are really good right now. Locking a customer in the 6s today. I think too many people dump properties instead of be patient and wait. Great response.
1 Reply
Keith Gephart
Member since 2025 · 17 posts · 10 votes
1y
Quote from @Doug Smith:

This happens a lot and is one reason lenders are hesitant to do flip deals for newer investors. That being said, it's happened to me...many times. You get into a deal and, for some reason, the property doesn't move. When this happens, we set a date if by which it doesn't sell, we put a tenant in there for a year. You can finance it with a DSCR loan using the value as opposed to your purchase price/cost after you've owned it for 6 months, so you're well past that. You can collect your rent and wait for another, better market. Every time we've done that, we've actually made more money. It's not the end of the world.

This is excellent advice!
0 Reply

Mohamed Sylla

Real Estate Agent · Philadelphia · Member since 2024 · 16 posts · 6 votes

1y

Hey Vivan — appreciate you sharing this, and major props to you for finishing your first flip in one of the most active zip codes in Philly.

Sorry to hear about the contractor situation — unfortunately, that kind of delay (especially with poor communication) happens more often than it should in this space. If the completion date was clearly stated in the contract, it could be worth having an attorney review it. Even if you don’t sue, sometimes a formal demand letter can motivate them to negotiate or cover some of the damages.

As for showings slowing down — that’s something I’ve seen across several flips this summer, especially in the $350K–$450K price range. Rates have buyers hesitating and some retail demand has cooled. You might consider staging tweaks, new photos, or offering a closing cost credit to help it stand out.

That said, it sounds like you’ve learned a ton, and you’re already ahead of the game by turning this into a foundation for your next deal. If you’re ever looking to talk through local numbers or want to compare notes on upcoming flips, I’d be happy to connect.

– Mohamed

0 Reply

Vivan BhallaPro Member
OP
Member since 2024 · 30 posts · 38 votes
1y
@Mohamed Sylla messaged you
0 Reply

Mohammed Rahman

Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes

1y

Hey, thanks for sharing—this is the kind of real talk that helps everyone level up. Let’s break it down:

For the contractor situation, if your contract had a “time is of the essence” clause or any penalties for delays, you’d have a stronger leg to stand on legally. But even without that, you can still pursue damages if you can prove the delay was due to negligence or breach of contract.

That said, suing a contractor isn’t always worth it unless the amount you’re owed is substantial and the contractor actually has the money to pay. A good first step would be having a real estate attorney send a formal demand letter. Sometimes that alone pushes them to settle. But be realistic about the time and cost of a legal fight.

As for the house sitting on the market—it’s a tough mix of timing and price sensitivity right now. Philly’s market has cooled a bit in certain neighborhoods, and buyers are cautious with higher rates.

A $5K price drop probably didn’t move the needle enough. You might need to do a more aggressive price adjustment or offer incentives like seller-paid closing costs to spark attention.

Also, re-evaluate your listing photos, staging, and even consider switching up your agent’s marketing approach. Sometimes a fresh listing strategy works better than just a price cut.

But the biggest win here is your mindset—you’re ready to take the hit, learn from it, and roll into the next deal smarter. That’s how you build long-term. This project will sting now, but it’ll sharpen you for the next one.

Keep pushing. You’re doing what most people don’t have the guts to even try.

1 Reply

Simmy AhluwaliaPro Member

Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes

1y

As stated above, yes, an Exit, if you don't sell will be to refinance into a dscr loan and put a tenant in place. All depends upon what your current debt looks like and the market rents in your area.

0 Reply

Alan AsriantsBusiness Member

Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes

1y

Hey Vivan, assuming the project was very extensive, having the contractor take an extra 2 months on your first flip is not even that bad... props to you on that.

Generally the 19145 Zip code has been performing slower for the past few years. The 19146 part of the point breeze section (as close to washington ave/grad hospital) and broad street) performs much better.

Without knowing the address of the property, it would be tough for me to give you a true analysis of the ARV and why you are not selling. Feel free to reach out to me directly and I can take a look at your deal and see whats going here and why it might not be moving.

My guess is that the ARV might have been overestimated and finishes are not top end. Also keep in mind it is normal in that market to sit for 30+ days.

[email protected]267-767-0111

Alan Asriants - New Century Real Estate 591 Reviews

View Page

1 Reply

Vivan BhallaPro Member
OP
Member since 2024 · 30 posts · 38 votes
1y
@Alan Asriants messaged you
0 Reply

Mike Klarman

Specialist · NJ · Member since 2022 · 1k+ posts · 658 votes

1y

So, if the worst that happened to you is the contractor was a few months late, you are a big winner. He didn't rip you off? His work was decent? You beat him, he didn't beat you. If he met that contract date, he'd be the gold standard. They never meet the contract date.

I know point Breeze. I grew up in South Philly. I have a client rehabbing 1604 Bancroft right now. You will never get 400k, nor 375k. You may not get 350k or 325k. Philly was greatly affected by the Appraisal scam that was uncovered. Bogus ARVs were being handed out. I know that you may see comps at mid 300s but, I'm telling you. I had a client who had a house for sale for one year and the work was good. Right on the edge of fishtown/Old Kensington area. I had a client who had a house in East Falls next to Manyunk. They sold for 30% under ARV.

If the action on your house has stopped, then you are still over priced next to what else they see at that price point.

I was 0 - 4 in Philly with clients and I left there, my home market. It's treacherous there right now for flippers. treacherous. I wouldn't even think of looking in the Philly market for a flip, and if I was doing a BRRRR there forget buying on market.

This is why you need to keep project cost to ARV as low as possible. Cause if a market dips, you can still get out with a win.

I have horror stories about the Philly market. Properties taking forever to sell, rehabs that went on for 9 months, constantly reducing sales prices to exit.

2 Reply

Deborah Wodell

Lender · Sanford, NC · Member since 2024 · 358 posts · 120 votes

1y

Appreciate you sharing all this, Vivan. Flipping definitely comes with its lessons, and it sounds like you handled a tough situation the best you could. That contractor delay is rough, especially with the extra holding costs. If the completion date was clearly in the contract, it might be worth talking to an attorney just to see what your options are. Even a formal letter can sometimes get them to come to the table.

As for the listing, I’ve been seeing the same thing lately. Showings have slowed down and buyers are being way more cautious. A five thousand drop might not be enough to make a big difference. Sometimes a fresh set of photos, small staging changes, or offering closing cost credits can help draw more interest without cutting too much into your return.

But honestly, you’ve got the right mindset. Learn from it, regroup, and go into the next one better prepared. Most people never even try, and you’ve already done that. If you ever want to talk numbers or funding options for the next one, feel free to reach out. Keep going!

1 Reply

Sultan Ali

Wholesaler · Irvington, NJ · Member since 2025 · 112 posts · 53 votes

1y

Tough first flip but lots of valuable lessons here appreciate you sharing openly.

I work closely with investors sourcing off-market deals in NJ, and lately I’ve heard similar frustrations with contractor delays and price-sensitive buyers. Definitely seeing slower showing activity in some markets, especially if days on market creep up or pricing hits resistance.

If you’re planning your next flip and want something cleaner upfront (better margins or less rehab uncertainty), I might be able to help find options that match your criteria.

Wishing you a strong close on this one!

0 Reply

Husnain Mushtaq

Member since 2023 · 5 posts · 1 vote

1y

I think you got fooled with that ARV for that neighborhood,

My quick advice to you would be to refi into a DSCR and hold.

I think in 1-2 years, especailly with a rate cut (Hold your breath, theres no timing these things), you'll able to be reaching the $375-400k+.

A couple of things to add,

That part of the city isn't gentrifying, the zip to the north as mentioned by Alan, is the line that the city has prioritized to gentrify and improve, south of washington st.

So it'll take time for things to trickle down, the best bet for you right now is to refi and hold.

I know that sucks but you should have a good asset and put some tenants into it and you'll prob be able to cash flow, saving for that next property.

If you want to do mroe deals you can probably access the equity from this building and get into the next one.

How is the renter market in this area?

I do not think this area has a boom in new construction like a fishtown or center city might, the supply and demand metric might be on yourside, but youre prob not getting the cool, remote worker - high rent type here.

0 Reply

Peter MckernanBusiness Member

Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes

1y

There is more inventory now, more like a 2019ish market.. Nationally about 2 million listing across the board. So I would drop the price again. The market was hotter earlier this year and started to go down on the demand the later the year got because of inventory and rates still being high.

If I am reading this right you are still in the black for profit, all in $277,500, and with sales fees if not added $18,750... $296,250.. Then your profit is more than 10% at a sales price of $350,000 (not taking into account holding costs).

The McKernan Group4.958 Reviews

Website View Page

1 Reply

Husnain Mushtaq

Member since 2023 · 5 posts · 1 vote

1y

@Divyanshu Khare

check out Peter's reply, more supply gives more negotiating power and likely prices coming down in the next 6mo

0 Reply

First Flip - Analysis and questions

First Flip - Analysis and questions

Most Popular Reply

17 Replies