Rental Property Investor · Providence, RI · Member since 2014 · 15 posts · 21 votes
Hi, I just wanted to share my first flip with the BP Community. On February 1st I purchased a single family for $105,000 from a wholesaler. The property was the ugliest house in the neighborhood and was abandoned mid-rehab when the insurance proceeds did not cover the cost of to repair the home after a small a fire.
Because I purchased the property in Cash and bought it As-Is the local building officials were not in the loop and immediately put me on their Sh*T list when I filed for permits. Original owners attempted to put the house back together but must have ran out of money which is why they walked away. It took me OVER 30 days to get all the proper permits but we finally started March 1st. After 60 days of construction, I put it on the market and it sold within 1 hour! I knew there was inventory so I even priced it at a premium but it still sold in less than one day. Now all I have to do is cross my fingers that it will appraise!
When I say I sold something, I mean I actually got a check in my hand. What you mean is that you accepted an offer in less than 1 hour. An offer and a check... good thing they aren't the same thing because I give out lots of offers every week.
Hey, I'll give you a $1M for that house. It's sold!! Now you can post how you made $800K profit on one deal.... as long as it appraises. That little contingency right there, that cost me a retail sale earlier this year. Those appraisers love to kill sales.
Here's some sound advice that will prevent you (and anyone else reading this) from buying a new car/furniture/vacation with your pretend profits before close of escrow; The deal ain't done until the check clears the bank. Remember that. It is very important in this business. Very Important. It will save you from getting into another deal with your expected profits and then facing financial ruin when they don't show up on time. And, it will prevent you from having to come back here and tell everyone how it didn't quite work out like you thought it would (they typically don't). Nothing worse than a big serving of crow.
You won't believe it and no one on here probably will either, but I actually had a bank wire money on a deal, then somehow magically suck it back out and *Poof!* they never funded. Just like that. Even the escrow company couldn't even figure out how they got their money back, but I can certainly tell you they did it. That was where that phrase above came from. Once they wired we thought it was a done deal. Nope. Here are two more rules of thumb for real estate flippers;
It will take long than you think it will.
You'll make less than you expect.
I'm about the most optimistic person you'll ever meet, but rules are rules and these three have proven themselves true time and time again. There's always exceptions, but don't be fooled.
House looks great and I hope it makes it across the finish line. On a side note; what is all that white stuff and was it expensive getting it all cleaned up?
@tyler leonard congratulations on the rehab, the pics look great. I am intrigued about that staircase also. was their a spiral staircase previously? where does it lead? How much did it cost?
Like a fart in the bathtub...... reality bites, funny thing is I just accepted an offer on one of my deals and reading your great advice was good to put my mind right.
Reality can be inconvenient, the "rules" make this business so much more predictable. I'm a believer, seen many crash and burn with way more dough in there pockets.