How good was this deal?

Question

I have spent 26 years involved in real estate in one form or another, but feel that much of my knowledge is surface knowledge to a degree.  Real Estate is so broad!  I'm considering doing a first time flip in the next couple of years, but I just want to get a feel for how well I've done so far and eventually, when the time is right, establish some connections for this next phase of my R.E. experience.  Confidence is not my strong suit, which serves me on one level, I do my homework, but hinders me in other ways, not trusting I've done well.  Feedback is welcomed....  so here was my first deal:

2004 I purchased a four acre parcel that included two doublewide mobile homes for $65,000.  The mortgage was 0% down, 0% interest, for ten years, $500 pmt and pays off next year.  This property brings in gross rent of $1600 a month, no utilities included.  My management style is way too nice, but has served us in some ways, but I have room to tighten for sure.  I think my initial deal was decent, but I know I need to cultivate more confidence moving into flipping because that type of project is no joke nor for the faint of heart.

Thoughts on flipping  coming...

2008 we purchased our third rental for $52,900 which is a gorgeous rehabbed single wide mobile home that brings $900 a month partially furnished, satellite tv included, no other utilities.  I feel I paid too much for this one long term, but we bought it as our personal home right before the crash.  This one we are looking at selling soon, potentially.  Exploring that idea for now...

Devan Mcclish · Answer

Account Closed

You are just going to have to pull the trigger. Gaining knowledge is great and all, but you will never truly understanding flipping until you do it. Learn to evaluate a deal, once you do that, you will be fine. It took me three years to find a flip. Mainly because I did not want to lose money on my first flip and I did not want to overpay for anything. I followed the standard ARV x .7 - repairs = MAO, and it is turning out just fine.

We ran into issues, like the house not having insulation (no way for me to see that until walls are opened up)

Main water line had a leak (again can't see that until it's inspected which I had to close quickly)

The ceiling fell in, the floor fell in, studs were rotted, but I overestimated my repairs and it will turn out fine.

The pipes are copper, that is not up to code here. I did not know that.

These are all things you will never know until you just do it. TAKE ACTION. that is the most important thing. You will learn as you go

Account Closed · Answer

for decision making...  :)

Account Closed · Answer

I am taking action a little everyday.  I've picked the zip code I want to work in, am now studying the neighborhoods and watching for deals.  My H and I are focused on debt reduction before we take this on, so that too is an active project and yes, I agree, I will learn best further into this process when the flip is under way. I'm a numbers girl, so I love the percentage rules like the one you mentioned.  I discovered that one in the last couple of weeks and it gives a great structure.

Account Closed · Answer

I am taking action a little everyday.  I've picked the zip code I want to work in, am now studying the neighborhoods and watching for deals.  My H and I are focused on debt reduction before we take this on, so that too is an active project and yes, I agree, I will learn best further into this process when the flip is under way.