My first flip (four year live-in)
We just completed our first real estate deal, it was a four year live-in flip. Our original plan was to purchase the house, live in it for a while, and turn it into a rental. However, my wife's job relocated us to the Chicago area.
I am a young lawyer.
Bear with me because I'm a new and still learning how to properly value and present the numbers. Here's my attempt:
Location: St. Louis, MO
Purchase price: $50,000 (short sale)
- aunt was agent, so fee was waived (she was helping us out)
- borrowed money from grandma for the down payment: $13,000
Material costs: $8000
I forgot to itemize everything over the course of the four years, but the improvements were:
-blown in insulation
-tile floor in kitchen
-new bathroom flooring x2
-new basement carpet
-new basement flooring (previous was rotted through)
-new carpet in bedroom x2
-hard wood flooring refinished
-new refrigerator
-painted entire interior of the house
-installed two custom closets in bedrooms
-repaired and repainted the garage
-tore out dinning room drop ceiling, installed drywall ceiling
All the work was done by us, save the hardwood floors.
Sale Price: $108,000
less:
-$6000 in fees (man I need to get a real estate license)
-$5000 in concessions
Net: $43,000
$108,000
-$33,000 left on the note
-$13,000 to grandma
-$6000 fees
-$5000 concessions
-$8000 material costs
The problem that I have is how to value this in terms of holding costs. Our mortgage was $410 on the property, whereas we were paying rent of $725 before purchasing this. I tried to comp the rentals in the neighborhood, and if we had not purchases, I am convinced we would not have found a 2/1 for anything less than $600 (most were closer to $900).
Pictures before:
After Pictures
It was a great experience, and I am looking forward to getting into the real estate game here in the greater Chicago area!