Investor · Member since 2013 · 92 posts · 26 votes
Tenants moved out of our first investment house in DFW, which we're selling for a few reasons. The left it dirty and battered. We wanted to turn it over as quickly as we could to reduce holding costs, yet we both have demanding full-time jobs (teacher and mortgage industry) and two little kids (5 and 2).
Despite that, we managed to turn the house over in eight days using our lunch breaks, afternoons, and one weekend to coordinate the project. We are exhausted, but I am so pleasantly surprised by how well we worked together on an intense, stressful project like this. I feel like it bodes well for our futures in RE investment.
Here's what the house looked like on May 1:
And here is what it looks like now, after granite, flooring, paint (walls, trim, ceilings, garage), appliances, light fixtures, and dozens of other small-to-medium fixes.
Edit: Hat tip to @jscott -- I had no idea what color to put on the walls, but I remember reading he uses SW Realist Beige in all his flips, so we used that, too.
I got it at Rent-a-Center, a rent-to-own place. I explained what I needed it for, and we pre-paid for one month with free pickup and delivery.
I looked into traditional staging, but it was way too expensive.
For about $500 I got a dining set, two sofa sets, and two bedroom sets.
I felt kind of dumb after it was delivered, because I thought we were getting platform beds, but it was really just the headboard. My husband brought over some copy paper boxes to make fake box springs. We put air mattress on top and put them against the headboards, which we leaned against the wall. With the bedding on top, it doesn't look awful, but if we stage a house again, I'll buy bed frames.
I got the coffee tables and desk at the Salvation Army for about $15 each. I also got some art there, but we ended up not wanting to put nail holes in the wall.
We got a small dining table at IKEA, and the wooden folding chairs came from our garage. The patio furniture in the backyard is ours as well.
I wish we had some rugs and some art on the wall, and I wish the beds looked better, but overall, I'm pretty happy with it.
Investor · McKinney, TX · Member since 2012 · 588 posts · 224 votes
12y
Unless your floors are perfectly level, I would not do vinyl plank flooring. It REALLY shows off imperfections that could hurt you in a flip. I did it on a low to mid range rental and it is OK there.
I did something similar on a bed and air matress.
Pics look great. If the house is as good as it looks in pics I think you'll be happy with the outcome. Congrats again.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
12y
looks awesome.
how was the experience with contractors from CL? give me details, type of ad, where did you place it, response rates, how did you weed them out, etc, etc...
Investor · Fort Collins, CO · Member since 2012 · 30 posts · 5 votes
12y
@Jessica G. Looks really good! That 8 day timeline is fantastic as well.
The ARV being 180k but what would the original home have sold for? Because I think that is the real gauge of success on this "Flip" though I acknowledge it wasn't a pure flip.
Realtor · Chicago, IL · Member since 2013 · 103 posts · 44 votes
12y
@Jessica G. outstanding job you did in the short time and with your budget! Very impressive! Best of luck to you down the road with your future investments.
We agonized over pricing. It's so hard right now, because inventory has been nonexistent, so there are very few comps.
On the other hand, get this -- the same day we listed ours, the guy TWO HOUSES DOWN listed his house at $145,000. I almost fainted when I saw that. He has no yard, and reading between the lines, there are no updates/upgrades in his house, but still.
Houses of the same age nearby that are similarly sized and in similar neighborhoods have been flying off the shelves at $165,000ish with multiple offers. Nothing makes sense, though -- we toured a similar house with NO updates (gross, old carpet, dirty paint, old appliances), and it lasted only a week at $169,000.
In our subdivision, in the last 90 days, there have been three sales. A 4/2/2 at $169K (updated), a 3/2/0 at $179K (mostly updated; layout exactly like ours except they converted the garage into living space), and a 3/2/2 at $141K (no updates). Current 3- and 4-bed listings in our subdivision are listed at $150K (few updates), $145K (mentioned above) and $278K (he's dreaming).
So we'll see how the house does at $180K. I really hope we haven't misjudged the situation. After a spring of no listings, inventory has abruptly increased around us -- mostly similar homes with no upgrades/updates -- so I hope that doesn't end up hurting us.
I got the painters off AngiesList, and I got quotes from three granite guys who have storefronts in our neighborhood. I got several quotes for flooring from local businesses I Googled, but ended up finding the guys we used on Craigslist. They have a storefront across town from us.
When it came to a handyman, though, everyone was booked way out, and I really wanted the work done quickly. So I posted in "gigs" and in "skilled trade" that I was looking for a handyman TOMORROW, listed the scope of the work, and mentioned that I preferred someone bonded/insured. I listed my phone number and asked people to text me because I was at work.
Pretty soon, my phone rang, and it was a guy who hadn't seen the "text only" part of my postings. I talked to him quickly, noted he seemed very competent and experienced, and ended up asking him to meet me at the house that afternoon. I deleted the postings in an act of faith, because I couldn't have the phone ringing all day while I was trying to teach.
I showed him all the work, he told me how he would approach each task, and I was impressed enough to hire him. He worked much cheaper than the handymen I've used before via AngiesList, and he was much better at his job. We could have been horribly burned, but he ended up doing an AMAZING job. So we were lucky.
Investor · Fort Collins, CO · Member since 2012 · 30 posts · 5 votes
12y
@Jessica G. Wow those comps really are all over the board. Though from those few recent comps and current listings 179k seems like a good price point to start.
Not to mention a very nice ROI on your reno's. Good Luck I hope it sells very quickly
Investor · Member since 2013 · 92 posts · 26 votes
12y
Yep, we closed. Final numbers were not as good as anticipated because of a couple of disappointing actions by the appraiser.
We put it on the market at $179K. We got an offer within a couple of days from an FHA buyer for $165K, and they accepted our counter of $172,500. After the inspection we settled on $2K credit for repairs (she wanted the landscape graded, new fixtures in the bathrooms, and a few other small things).
I should have met the appraiser in person, as I have heard advised a few different places, but I thought sending along a list of repairs and upgrades would suffice as property values are up so much in the area, and the comps seemed obvious to us.
Well, the appraisal came back at $160K. We appealed with a list of better comps, but after taking a week to even look at them, he ended up not adjusting the appraisal.
The buyer offered to pay $160K with no concessions (of course she did) and we sadly agreed.
On the morning of the closing, I pulled up to the title company and reached for my phone. Saw texts from my husband saying, "Call me as soon as you get this."
The appraiser decided the day before closing to deny approval of the loan because there was flaking paint on the exterior of the house. This was not mentioned by him or anyone at any time before the day of the closing. In the appraisal report, there is a half-sentence mention of the condition of the exterior paint, but it does not indicate in any way that the loan would not be approved because of it. (The paint, 8 years old, looks good enough that I thought our rehab dollars would be better spent elsewhere.)
(Side note -- does anyone know how to file a complaint against an appraiser?)
So we had to have a company come out and paint the exterior as quickly as possible, at a cost of another $1,200. We closed three days later.
So... final numbers after subtracting the cost of the rehab SHOULD have been about $30K profit according to our contract price. Instead, because of a very zealous FHA appraiser, we took home about $19K.
This was our first home, and owning it through the the bubble, the recession, foundation repairs, terrible tenants, and more, I am just happy to be finished with it and moving on to other projects. I learned a TON rehabbing it and selling it, so the experience, at least, was valuable.
@Jessica G. Did you close? How did the final numbers end up? What role do you think staging played in the listing?
Oh, and I think the staging helped a LOT. The house looked great with just $500 worth of rental furniture and IKEA knicknacks, and the MLS photos were amazing. Furniture made the bedrooms look bigger and defined the combo living/dining spaces. Even though we were priced a little ambitiously, we had tons of showings and a quick offer.
Investor · Plano, TX · Member since 2013 · 63 posts · 11 votes
12y
Thanks for updating us. Wow, what a plot twist! Meeting the appraiser sounds like a good idea and I will definitely take that advice in the future to try and stop issues like this if I can. I think the rooms-to-go idea is awesome, we're nearing completion on a flip in Mesquite, and we're going back and forth on if we think staging is worth it on a lower priced home (probably going to list for 154,500), but we don't want to sacrifice thousands by putting in ~$500 worth of staging--- but all that would be moot if the appraiser knocks the value down.
- the kitchen looks amazing!! great job! The best take-away for my learning curve that I got from your thread was using Rent-A-Center for staging furniture. I would have never thought of that but it makes perfect sense!
@Jessica G. Did you close? How did the final numbers end up? What role do you think staging played in the listing?
Oh, and I think the staging helped a LOT. The house looked great with just $500 worth of rental furniture and IKEA knicknacks, and the MLS photos were amazing. Furniture made the bedrooms look bigger and defined the combo living/dining spaces. Even though we were priced a little ambitiously, we had tons of showings and a quick offer.
Awesome job! I love the rehab ya'll did!
I'm in Roanoke, Tx currently hunting for my first deal. Good luck neighbor!