Hi everyone! I haven't really posted in about five weeks, and this is why:
My first true flip! I made a ton of mistakes and learned from every single one. My "plan" was simply to follow the advice in both of J. Scott's books as closely as I could (I even took them to a copy shop and had the binding cut off and holes punched so I could put them in binders). Next time I think I'll be able to spend less money and less time. Onward!
Let me know if you have questions. There is some commentary in the photo album.
Purchase price: $93,000
Cost of hard money loan & fees: $4,000
Commissions & selling costs: $8,000
ARV: $140,000 to $145,000
looks great good luck on your sale
That looks great @Jessica G. Good luck with the sale!
What would you say were your top 3-5 learnings from this project?
Congratulations on your first flip!
It looks great Jessica! Update us on the sale, but the rehab at $14k was well spent to address the function and overall appeal.
Congrats Jessica, just from the looks of it, your going to do just fine in this hot industry.
Indeed, you never forget your first. Mine was a dirty, dirty girl, very much from the wrong side of the tracks. But she cleaned up nice.
Great Job with the rehab. The changing of the floor plan was a great way to make this a marketable sale.
Sure @Uday T. Here are some of the biggest issues that I am trying to learn from:
1) I got a written inspection report before purchasing the property, which, duh, of course, right? Well, the inspector flagged a bunch of "issues" that aren't really problems at all in a house built in 1957... but sound scary to average buyers. Now that I am selling, the TREC seller's disclosure form instructs me to attach a copy of this inspection report to provide to buyers. I'm unhappy about that, because I don't want people freaking because the inspector says the house needs an upgraded electric panel. I've had two licensed electricians take a look and they both said it's fine, safe, and compliant with city code due to grandfathering. Same issue with some plumbing and natural gas fixtures. Also, some of what he wrote is inaccurate. He said the automatic opener on one of the garage bay doors is broken. Um, no dude -- there's no opener even installed on that door. Not to mention, about 70 percent of the stuff he flagged in the report is no longer relevant because I've done so much renovation to the house.
2) When you use a hard money loan, you have to pay for the renovations twice -- once up front, then again when you actually have the repairs performed. The lender reimburses you, but only after inspecting the work. I knew this in my head, but in practice it was hard to time projects according to our reimbursements.
3) I didn't have an airtight scope of work, which may have been my biggest error. Next time I will plan and prioritize literally every single thing I need to buy and do. I will have a sheaf of spreadsheets that I will consult every three minutes and I will be proud of my organization. My planning was way too loosey-goosey and I am lucky I didn't land into big trouble either financially or with the rehab.
4) I undervalued having a contractor manage the project instead of me. I thought I could manage the rehab 100 percent myself and even do some of the simpler projects and save money. Well, without owning all the tools a contractor will have in the back of his truck, I think it was just as expensive doing it myself because of the millions of Home Depot runs I had to make, and how slow I was. And I underestimated how much upper-body strength, patience, and experience you have to have to perform this kind of work, even things I thought were simple, like installing floating flooring and tiling a bathroom floor or backsplash. And being on the job site all day every single day was tiring.
Looks great! From what I saw, it looks like you stretched 14k twice as far. Would you mind breaking some of those costs out? Total sq ft? You have it listed yet? Any offers? Again, great job!
@Jessica G. Sounds to me like you should pay to get a new inspection done!
Over all Great JOB! I hope it sells quick!!
Thanks guys. It turns out this is a crappy time to list a house; sales have slowed way down because it's the end of the summer. I hear things should pick back up around Labor Day, but hopefully we'll already be under contract by then. We went on the MLS on Wednesday and have had six showings. Only one agent left feedback, and it was that the house was very nicely updated but was "too old." Hmm, maybe you shouldn't look at houses built 60 years ago then.
I don't have all my costs broken out yet (maybe by tax time), but here are some ways I saved money. Mostly, I spent a lot of time shopping around to find good deals on supplies. I didn't use anything low quality; I just searched for good deals on good stuff. This was especially important because the 1958 kitchen had a ton of oddly sized appliances, and buying them at retail would have cost a ton. The second price in each set is what I think I would have paid at Home Depot.
Purchased on Craigslist
Kenmore stainless steel wall oven (almost new; 24" is a hard size to find) -- $550 vs. $1200
Stainless vent hood (new in box) -- $200 vs. $400
Purchased at Sears Outlet
Whirlpool stainless dishwasher (new, tiny hidden dent) -- $275 vs. $500
Purchased at discount builder supply stores (Habitat for Humanity REstore, Seconds and Surplus, ShoptheBoss.com) All this stuff was brand new in the box.
4 brushed-nickel ceiling fans/lights -- $160 vs. $400ish
2 brushed-nickel vanity lights -- $40 vs. $100ish
4 24"x96" granite slabs -- $400 vs. $1,500ish
Undermount sink $150 vs. $250ish
660 sq. feet of handscraped engineered floating wood floor -- $660 vs. $2,000+
40 sq. feet of glass mosaic backsplash -- $40 vs. $320ish
Ceramic tile for master bath -- free (I used some the people who sold us our house had left in the garage) vs. $200ish
1,000 sq ft of FHA-compliant carpet installed with pad -- $1,100 vs. $2,000ish
Wow, this is impressive on a $14k budget. What a night and day difference. Congrats @Jessica G.
Oh, and I love the captions for your photos. You are right, that floor is BOSS! :)
Congrats on finishing the reno, Jessica! You are a girl after my own heart -- buy high end materials at major discounted prices. Now lets see your first born sell, sell, sell!
You did a nice job with the limited funds. Alot of bang for the buck. Good luck on the sell !
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