My first flip at 26, a woman, ZERO construction skills.

My first flip at 26, a woman, ZERO construction skills.

Investor · Versailles, KY · Member since 2013 · 82 posts · 167 votes

I closed escrow on the sale of my very first flip back in January. Craziness of life got in the way and I never got around to posting about it here. However, I figured it was time. I SERIOUSLY credit BP for some of the success here. I probably could not have made it happen without this site and J Scott's book. I have not been a very active poster (which I am trying to remedy!), however I have spent a lot of time on here reading and absorbing everything I could. 

The process of the deal and the steps to get there were a long one, starting at the end of 2013 getting my real estate license. I did this just so that I could get MLS access and the freedom to run my own comps and look at properties on my own schedule. Saving 6% is great too.

So my flip was financed through a private loan at 6%. I purchased a 1,580 sqft 2/1 fannie mae foreclosure, built in 1948 in Phoenix. I'm (or, was when this started) a 26 year old woman who knew nothing about construction. No pressure. I converted the house into a 3/2. Re-did basically everything except the roof. Including the framing of a master suite and bathroom in the existing footprint of the house. I sure jumped in with both feet, ha.

Did I make mistakes? YES. Did I overspend? PROBABLY. Was it perfect? NO. I would do so many things on this project differently the second time around. But I am SO glad I did it, and made it happen. You can read all you want, but you just don't know until you are in the middle of the process (wanting to cry, pull your hair out, sweating profusely because it is phoenix in the summertime and 116 degrees and what were you thinking flipping a house?!) that is when you learn what you are made of, toughen up, get creative, and get it done. Whatever you think you know about getting it done, you just don't know until you do it.

The toughest part was learning to manage subcontractors. I did not use a general contractor. I definitely got taken advantage of twice. This was expensive, and I was NOT happy about having to pay someone to rip out and fix crap work. However I needed to learn that lesson. Now my paperwork is tight and my tolerance for their BS is non existent. 

I purchased the property for $104,000. Sold the property for $210,000. Before you get too excited, my profit was only $19,000 after expenses, holding costs, closing costs, and getting ripped off by subs. HOWEVER this was my FIRST deal, and I did it all alone. Start to finish took me 6 months. So this project took longer than I thought, cost more than I thought, but I still made money, because I bought right. You really make your money upfront. Here are a few photos, and at some point maybe I'll come write a more detailed post of the highs and low of this experience and add some more pictures. Still, go out there and make it happen, if I can do it, you can do it. I did a second property in Scottsdale and now I've moved back to California and I hope I can get something big rolling.

Before: Don't be fooled by the "rock" exterior. It was plastic and cracked all over and hideous in person.

Nice A/C duct work there, though an open window. Pretty Fancy.

ok the couch looks hideous. It was all I had! I did just give it away, I wont stage with it again I promise, lol.

The former kitchen opened to a giant empty room in the back, that you accessed by walking into a large closet?? I sold the retro oven.

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Linda WeygantPro Member
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
11y
Originally posted by @Mark Freeman:

@Alex Applebee   Nice first flip!! No help from hubby?

 What the ...???  Do you ask this question of the married men on the forum?

See this reply in the discussion

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  • Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes
    11y

    very nice @Alex Applebee

    way to get after it 
    good luck on future projects

  • Allen MarisPro Member
    Investor · Santa Ynez, CA · Member since 2008 · 375 posts · 175 votes
    11y
    Originally posted by @Alex Applebee:

    I purchased the property for $104,000. Sold the property for $210,000. Before you get too excited, my profit was only $19,000 after expenses, holding costs, closing costs, and getting ripped off by subs.

    On the first flip, if you make any money, you're ahead of the game. You learned a lot plus walked away with some money. Well done.

  • Investor · Versailles, KY · Member since 2013 · 82 posts · 167 votes
    11y
    Originally posted by @Mike Dmuchoski:

    @Alex Applebee

    Congrats on a phenomenal job!  I especially like the flooring and white cabinets, which are very "in" right now.  And the return you made was quite good in our competitive Phoenix market.   

    I have a few questions:

    1) Was your HVAC fix straightforward or did it get hairy (i.e. new unit, reducting, evap in the loop)?

    2) How did you find private funding, particularly at such a great rate?

    Thanks, Mike

     Ohhhh, the HVAC. The HVAC initially wasn't too difficult. I found a GREAT guy (if you are in PHX message me and I'd love to send him some business.). He rented a crane and put it back on the roof where it had originally been. He did have to build ductwork in that addition because there was none, and also as we were turning one large space into multiple rooms so this is something we would have had to do anyways. He replaced some interior parts and we were good to go. initially.

    Well, then my second crappy sub comes along and I hired him to do A LOT of work (bad idea, now I dribble work out to people in tiny doses.) So he gives me this song and dance about how we still need a register and return in the kitchen, but luckily he can fix it for $375. I was a little skeptical of his reasoning, but after a long spiel I believed him and told him to get it done. Well after quite an ordeal a few weeks later I fire him. When in escrow we did the home inspection. The inspector comes back with photos of the ducts to the back of the house being cut off completely and then re-routed and ziptied together to go to the kitchen. I would dig up the photo if I had time right now. So I called my A/C guy back out and he fixed all the damage done by the sub. I had to totally replace the duct cut open and ziptied together. The good A/C guy takes a ton of pride in his work and he was so upset over what had been done to the ducts you would think the other sub had set his mona lisa on fire. So that's the HVAC story. 

    The private funding was through a family loan. The family member finances other people's flips, although doesn't personally flip houses. Of course family lending comes with it's own set of issues, but I am extremely grateful.

  • Las Vegas, NV · Member since 2015 · 84 posts · 8 votes
    11y
    Originally posted by @Linda Weygant:
    Originally posted by @Mark Freeman:

    @Alex Applebee   Nice first flip!! No help from hubby?

     What the ...???  Do you ask this question of the married men on the forum?

     Good thing he didnt ask to see ALEX in Jeans and a white t shirt...........hahahahaha.

    If money is the end game i think with that smile Alex could make way more concentrating in Million dollar buys and sells!

    Please  for you naysayers.  This thread wouldnt be this long if she were more home-style looking.

  • Investor · Versailles, KY · Member since 2013 · 82 posts · 167 votes
    11y
    Originally posted by @Vanessa Griffin-Clay:

    Hi Alex,

    Congratulations! Truly an AWESOME job for a first.  Was funding a problem? How was this deal structured? How do you cope with living where you work, and safety measures?

     I did not live in the flip. Safety measures were that I did not go to the property at night, and when meeting subs for bids I usually told them what I wanted and they walked through alone, or I would have all exterior doors open, wouldn't walk into any room where there was only one exit, etc. Not in an obvious way, but I was careful and aware. My husband and I were constantly in touch when on I was on the property. Also subs did not know I was a woman beforehand, I would set up appointments via text and my name being Alex is totally androgynous. 

    When I had my stand off with a sub and it got tense I had my husband with me. He kept trying to get us to walk into the house with him during the argument and we refused, having the discussion out on the sidewalk in plain view. I also had to call the cops to do a drive by that evening after that sub I fired commented that "He wouldn't do anything to the property, but he couldn't say what his guys would do." I also had good relationships with the neighbors on each side of the house and across the street and gave them a heads up to keep an eye out and call me if anything weird happened. 

  • Investor · Versailles, KY · Member since 2013 · 82 posts · 167 votes
    11y
    Originally posted by @Missy H.:

    @Alex Applebee

    Fantastic!!!!

    Can you tell us what your subs did that made them terrible and when did you know that you had to let them go?

     I need to do a whole post on this. Or book. Short version: lying, stealing, not showing up, not finishing work, making a mess and trying to charge me to clean it up. shoddy work. 

  • Clinton Township, MI · Member since 2015 · 1 post · 0 votes
    11y
    Wow, very impressive! That gets me super excited to do my first flip! I just started looking at houses so hopefully soon. Anyway, nice job! Way to get out there n show us newbies how it's done.
  • Investor · Versailles, KY · Member since 2013 · 82 posts · 167 votes
    11y

    For those asking how we structured the loan, we did things a little differently seeing as this was a deal within the family. Unless you have explicit trust in the person (and 99.9% I would say, don't) I would not do it this way. He is out of state and took my word on everything, and I made sure to have all the financials clear in order to honor that trust. It works for us. The house was purchased in his name and all repair funds were placed in a joint bank account. I was paid through escrow on the close of the house. through the HUD-1 and title company during the sale the family member/investor was paid the interest on the loan, the purchase price and repair cost. My personal LLC was paid the remainder after that was paid the remaining profit. It was called something like "realty consulting fee" on the HUD-1. It worked for us.

  • Investor · Versailles, KY · Member since 2013 · 82 posts · 167 votes
    11y

    Also I think we structured it this way because according to my investor he didn't think it would make money and he had planned just to hold it as a rental after I fixed it up. Hows that for a vote of confidence, LOL. 

  • Member since 2015 · 16 posts · 0 votes
    11y

    Looks great! Congrats on successfully completing your first flip. :)

  • Investor · Riverside, CA · Member since 2015 · 12 posts · 2 votes
    11y

    Congrats and very nice work!

  • Ben AndrewsPro Member
    New to Real Estate · Escondido, CA (San Diego) · Member since 2015 · 112 posts · 20 votes
    11y

    @Alex Applebee  Absolutely fantastic! Sharing your story here on BP is an incredibly valuable contribution for people like me who are still working on getting their first deal! Thanks for that.

    Best of luck with your future investments!

    -Ben

  • New to Real Estate · Colorado Springs, CO · Member since 2014 · 12 posts · 9 votes
    11y

    Making a profit on your first flip is a fantastic achievement.  The learning experience is priceless.

  • Investor · Frisco, TX · Member since 2014 · 76 posts · 18 votes
    11y

    @Alex Applebeeyou are my hero! I love the flip. I love that it was your first and you jumped in and did it all by yourself. I completed my first flip in May (should get around to writing up about it) and I understand that it's important to be a little more cautious in certain situations. I'm glad you were smart enough to not walk into rooms alone with one exit and so on. Great tips!  

    Congratulations! Can't wait to hear about your future ventures. 

  • Hawthorne , CA · Member since 2015 · 34 posts · 11 votes
    11y

    Congratz, excellent work!

  • Attorney · Kansas City, MO · Member since 2015 · 69 posts · 14 votes
    11y

    Thanks for posting. It was a real encouragement for all of us newbies out here, especially women in this male dominated field. Congratulations!

  • Realtor · Charlotte, NC · Member since 2014 · 935 posts · 467 votes
    11y

    @Alex Applebee I will pile on with the guts to glory accolades, well earned! 

    There is an underlying story here that most wannabes have overlooked and that is the PML. I love the comment , " according to my investor ,he didn't think it would make money and he had planned to just hold it as a rental".  First, a PML is relationship driven, backed up with facts and then results. He believed in you and your character was determined not to disappoint. No doubt he will fund any future flip as well. Trust is like a bank account, deposits are made and withdrawn, you just added a major deposit to your balance. Persevere!

  • Las Vegas, NV · Member since 2015 · 84 posts · 8 votes
    11y
    Originally posted by @Don Harris:

    @Alex Applebee I will pile on with the guts to glory accolades, well earned! 

    There is an underlying story here that most wannabes have overlooked and that is the PML. I love the comment , " according to my investor ,he didn't think it would make money and he had planned to just hold it as a rental".  First, a PML is relationship driven, backed up with facts and then results. He believed in you and your character was determined not to disappoint. No doubt he will fund any future flip as well. Trust is like a bank account, deposits are made and withdrawn, you just added a major deposit to your balance. Persevere!

     I read it different.   The guy gave a pretty woman a break.   Simple as that!  She knows it-this was not an ordinary business transaction!

    Who risks money on a novice.  Get real people!   I would if she was hot................hahahahaa!    Actually i wouldnt, id let another live the dream.

  • Wickliffe, OH · Member since 2015 · 48 posts · 18 votes
    11y

    I just literally covered my mouth with the palm of my hand at your before and after pics.....because they were so fantastic!  Wow, you did a great job!  I wanted to move in.  Keep moving forward and posting.  Thanks for the inspiration!

  • Investor · Joppa, MD · Member since 2012 · 1 post · 0 votes
    11y

    Congrats Alex, the house looks great, I am sure you had happy buyers.

    VC

  • Developer · Haddonfield, NJ · Member since 2010 · 58 posts · 14 votes
    11y

    You go girl. Starting is 95% of the battle!

  • Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes
    11y

    @Jay Hinrichs comment earlier here is something that everyone should see. A big reason that there was profit here instead of being break even is because of the private money loan at 6% instead of a Hard Money loan which would have been way more expensive, plus her getting her license and not having to pay a broker 5-6% is what saved the deal. Those things are absolutely key here and made all the difference. This was also a massive undertaking for a first time flip. This was a really big project converting a 2/1 to a 3/2. Having the square footage to conver that and pull it off is really impressive and added a lot of value

  • Investor · Rochester, NY · Member since 2014 · 66 posts · 27 votes
    11y

    Beautiful @Alex Applebee!!! Love your choice of finishes. Curtains always make such a huge difference.

  • Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Beautiful work.  Congratulations.

  • Investor · Taylorsville, GA · Member since 2014 · 352 posts · 540 votes
    11y

    Great job @Alex Applebee! The property is beautiful!  $19K isn't bad, but the education you got was priceless. Can't wait to see your other projects!

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