Diary of my latest flip

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Diary of my latest flip

Account Closed
Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes

I'm going to use this thread to track the progress of my current flip project. This house is in the Hickory NC area. The house was an REO listed in the MLS. It is a split level ranch with 3 bedrooms 1.5 baths and a full basement that is partially finished.

Purchase price: $41k 

Rehab/Holding cost estimate: $15k

ARV: ~$80k

I"m shooting for a profit of $15-20k. This is on the lower end of my desired profit margin on a flip, but it is actually the first one I've done where I am not doing any of the work. I'm willing to take a smaller return if I'm not swinging any hammers. We will see how it works out.

Before Pics:

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Karyn T.
Investor · Bellingham, WA · Member since 2013 · 210 posts · 138 votes
12y

@Jay Hinrichs 

"You would think all these folks renting would be buying but they just can't get there SH together and their credit issues."

I agree, for the most part...but I will say that part (a BIG part) of the problem is that credit chases you around for longer than the market stays stable.  People like myself, who took a huge hit, either financially (ours was financial...having to take out a large 5-figure "deficiency" loan to unload our east coast house that we couldn't even rent for a decent amount) or with credit, during the downturn are just now starting to dig out from the carnage.  A lot of good, stable, hardworking people got taken out or (in our case) knocked WAY back down the ladder through the actions of Wall Street and the housing crisis and because of the way credit works, with its decade-long penalties, even if you just had one big crisis,and got back to work/repayment, those people won't realistically be able to re-enter home ownership for another 3-5 years.  Add in the ridiculously tough credit requirements for new mortgages now....and the competition from investors like us...

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  • Will Lawhon
    Investor · Medina, OH · Member since 2014 · 2 posts · 0 votes
    12y

    can't wait to see the end$ result.  Keep us posted.

    0Reply
  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    12y

    What's your time frame on this rehab?  How many square feet?

    1Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    12y

    @Jon Klaus 

    I'm hoping for a 60 day rehab, but we are currently about 40 days in and its looking like we are going to go over on the timeline. Imagine that :) 

    This property is about 2.5 hours away from me, so it drives me crazy not being able to go and just get stuff done. The contractor has rehabbed 2 other houses for me and they pretty much stayed on budget and finished on time, so we will see. 

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    12y

    Oh, and its a tad over 1,000sf on the main floor and there is maybe about 500sf finished in the basement.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Account Closed 

      looks very Birminghamish  IE stuff I fund in B ham  lots of day lights and topo as opposed to flat lots.

    15 to 20k per flip is a nice pay day... we all want to make more but that money spends. its 5 years of Positive cash flow on the slow drip buy and hold model and sometimes ten years.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
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    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    12y

    @Jay Hinrichs 

    I agree, $15-20k is a fine pay day, and it does beat the pants off of my "slow drip" rentals. I am so torn right now on how to move forward with my investing. I love doing flips, in fact it is a passion. But flippers crash and burn when the market tanks. I am trying to build my rental portfolio (currently at 13 doors), but I really don't like rentals. I just do it because it seems like the logical way to build wealth and protect myself from market down turns. It seems to compliment flipping well. 

    I'd love to get into doing some spec builds like you are doing, but I'm hesitant to jump head first into something I'm not as familiar with. I need to ease my way into that I think.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    12y

    @Account Closed 

      I think we have another 18 to 24 months of pretty clear sailing IE interest rates stay were they are.. the nice thing about new construction is your dealing with the top end of the food chain as opposed to those that are credit challenged etc etc. So when you do get a buyer you get a 30 or 45 day escrow no funny business no mad dash to clear credit and clear to close .. the deals just go together very easily.. I find it much easier to sell a 350k home than a 100k or sub 100 k because the buyer is TRULY qualified as opposed to putting a round peg in the square lending hole of the low end.. If that make sense.  You would think all these folks renting would be buying but they just can't get there SH together and their credit issues.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Bryan O'Neal
    Contractor · Hickory, NC · Member since 2014 · 8 posts · 3 votes
    12y

    Hey Austin. That looks like the type of house I'm looking for to do first. My financing should be in place in about 3-4 weeks. What are you going to do to that house? Where is it?

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    12y

    @Bryan O'Neal 

    The house is in Newton close to the courthouse. It is pretty much a cosmetic rehab. New flooring, paint inside and out, refinish kitchen cabinets, new countertops, new appliances, new lighting, new bathroom fixtures, etc. 

    We did have to upgrade the panel to 200 amp and have the heat pump serviced and repaired, but everything else was in good shape, just outdated.

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    12y

    @Bryan O'Neal 

    There is a house just like it available just up the road. Let me know if you are interested and I'll give you the contact info for the seller.

    0Reply
  • Nhi Nguyen
    Contractor / Flipper · Hayward, CA · Member since 2014 · 195 posts · 86 votes
    12y

    It's amazing there are lots of areas around the country still have properties at very low price.  I'm having hard time finding fixers in my area for around $300 (for 3/2, ~ 1100 sqft).  :)

    Good luck Austin.  And what you plan to do with the $15k rehab please?

    0Reply
  • Ramon Jenkins
    Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    12y

    congrats

    0Reply
  • Karyn T.
    Investor · Bellingham, WA · Member since 2013 · 210 posts · 138 votes
    12y

    @Jay Hinrichs 

    "You would think all these folks renting would be buying but they just can't get there SH together and their credit issues."

    I agree, for the most part...but I will say that part (a BIG part) of the problem is that credit chases you around for longer than the market stays stable.  People like myself, who took a huge hit, either financially (ours was financial...having to take out a large 5-figure "deficiency" loan to unload our east coast house that we couldn't even rent for a decent amount) or with credit, during the downturn are just now starting to dig out from the carnage.  A lot of good, stable, hardworking people got taken out or (in our case) knocked WAY back down the ladder through the actions of Wall Street and the housing crisis and because of the way credit works, with its decade-long penalties, even if you just had one big crisis,and got back to work/repayment, those people won't realistically be able to re-enter home ownership for another 3-5 years.  Add in the ridiculously tough credit requirements for new mortgages now....and the competition from investors like us...

    4Reply
  • Bryan O'Neal
    Contractor · Hickory, NC · Member since 2014 · 8 posts · 3 votes
    12y

    My financing should be in place in about 4 weeks. Hopefully the offers will be rolling in on yours which will make that one really attractive!

    0Reply
  • Linda Quinton
    Real Estate Investor · Adelaide, South Australia · Member since 2014 · 36 posts · 25 votes
    12y

    Fantastic :-)  Hey I would be interested in the other property if we can also use your contractor!  Yes I know, we ask too much, just thought I'd be cheeky.  I look forward to seeing how this goes though.

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    12y

    UPDATE:

    I was in town yesterday to check progress and to buy supplies. I somehow managed to lose ALL of the progress pictures I took, so forgive me for that. I will ask my contractor to send some so I can post them.

    Progress is slow, but we are moving forward. We are hoping to be done in about 3 weeks. So, the timeline is shot, but I can live with that for now.

    I did get good news from another investor in the area. He informed me a house in the same neighborhood appraised for $95,000. I don't know the specifics of the house, but they are all very similar in size and look, so it can't be too much bigger. I'm hoping for a resell of about $80-85k, so that was good news.

    I'll try to post some progress pics as soon as I get them.

    1Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    11y

    Here are  a few "during" pics:

    Kitchen floor getting laminate:

    Walls/Ceilings/Trim painted (still need to paint doors white):

    Basement:

    As you can see, we are moving slow. Hopefully we are about to turn the corner and wrap this thing up.

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    11y

    Well, here we are going on 3 months and this flip just won't end! My contractor (who is also my property manager) has been incredibly distracted and is having a hard time finding the time to get the job done. I really hope to have it wrapped up and on the market by the end of the year, so we will see. Things are going so slow, I have decided not to add a 2nd bathroom like I had hoped to. This will hurt my ARV and probably bring my asking price down to around $79k, but I just want to get it done and move on to the next one.

    I am going to go by on Friday, so I'll snap a few pics to show the  progress.

    1Reply
  • Pat S.Pro Member
    Real Estate Broker · Asheville, NC · Member since 2013 · 82 posts · 29 votes
    11y

    Thanks for the update, was curious what's been happening! Sorry to hear it's so far off schedule.

    0Reply
  • Jimmy MoncriefPro Member
    Chattanooga, TN · Member since 2010 · 319 posts · 100 votes
    11y

    Looks great!

    Keep us  posted!

    Podcast Guest on Show #55
    0Reply
  • Casey Rolland
    Investor · Port Townsend, WA · Member since 2014 · 103 posts · 50 votes
    11y

    Hello @Account Closed  What is the Wall color you are using there? 

    Thanks.

    0Reply
  • Cal C.
    Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
    11y

    I think it is time for a new contractor.  His/her distractions shouldn't become your monetary losses.  

    2Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    11y

    @Cal C. 

    I can't say I disagree, but I feel a bit of loyalty towards this guy. He has been my property manager for several years and has helped me out a great deal. I am going to try to weather this one and hope things get back to normal. If not, then it will probably be time for a change. I hope it doesn't come to that.

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    11y

    @Casey Rolland 

    I am not sure of the color off the top of my head. It was from Lowe's, but I can't remember the name. I will see if I can find the label and I'll let you know.

    0Reply
  • Account Closed
    OP
    Investor · Waynesville, NC · Member since 2014 · 408 posts · 121 votes
    11y

    Here is a small update from my visit this past weekend. There were several workers there and things seemed to be moving along nicely. 

    0Reply
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