1st Flip!!! Learning the Hard Way

1st Flip!!! Learning the Hard Way

Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes

So I did it…after two years of reading and researching real estate, I pulled the trigger. I’ve never considered myself to be fearful of taking chances, even financial ones, but the thought of buying, flipping and reselling a house while still paying a mortgage on my primary residence, working a full time job, maintaining a relationship and still having a meager social life scared me to death…especially at 26.

I don’t bring this up to brag but to show that no matter what the odds and depending on how willing you are to take that calculated risk, it can be done.

Back in December my agent brought me to a house about 20 minutes away from my hometown in New Jersey. Although I considered myself somewhat experienced with finding and rehabbing homes as I did with my primary residence, I was definitely no expert and the house that he showed me looked great and quite possibly less work than I originally planned for.

(Spoiler Alert: I was wrong)

Getting the house under contract was a nightmare from the start. I went back and forth with the bank at least five times with negotiating and time extensions, missing paperwork and even had my attorney bail on me half way through (for totally unrelated reasons). Long story short, I didn’t even know I was closing on the house until 3hrs before I had to show up at my new attorney’s office.

Getting into the numbers, I purchased the property for $87,750 with 20% down. I used what little of savings I had left after working on my primary house and borrowed the rest from my dad. The ARV for the house hovered around $160,000 and after running the rehab numbers and walking the property with an experienced contractor friend of mine, I figured rehab costs to be approximately $30,000 with doing most of the work myself.

The rehab itself turned out to be a bigger monster than I had originally anticipated. To give you some examples, what I thought would be minor aesthetic repairs to the ceiling turned out to be structural issues, just about every pipe in the crawlspace burst when I turned the water back on due to the house being vacant for so long without any winterization measures taken and many issues with electrical outlets due to the previous homeowner nearly rigging the entire electrical system with duct tape. After all was said and done, rehab costs along with holding costs ran closer to $40,000. I had already planned on using my equity line to pay for the repairs, however I had to borrow additional funds from my amazing girlfriend and even…my agent’s mother (of course paying her interest on the loan).

When I had finally finished and showed my product to my agent, he was blown away by the results and was even comfortable, after running more comps, with listing it for an additional $10,000 at $170,000. We put it on the market on June 8, 2016 and six days later we had an all-cash offer for $165,000.

In six months’ time, I had made $25,000 and had received more educational experiences than someone could (or would) ever ask for. I firmly believe that it takes passion, patience and most of all persistence (as I learned from this project) to make these kinds of projects succeed. I was also fortunate enough to have family and friends that believed in me and helped out whenever they could.

Below I’ve included some before and after pictures of the house. I hope this inspires someone to go out and live their passion, as reading other’s stories on this site inspired me. Nothing is impossible when you have that passion and the ability to run your numbers. Looking forward to my next project, which I will be submitting a bid on tomorrow. Wish me luck!

Also, if anyone wants to see additional pictures or future projects, you can find me on Facebook, business name: Mileshore Investments.

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Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
10y

@Matthew Rembish,

On your next rehab, when you go to test the plumbing, do like the HUD inspectors do: attempt to pressurize the pipes with compressed air. If you can't develop or hold pressure, you know you've got plumbing issues, but at least you don't have a watery mess to clean up.

You can get everything you need at Home Depot including a portable generator and a portable air compressor and all the fittings to connect the air to a water hose bibb, or even a kitchen faucet.

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  • West Chicago, IL · Member since 2016 · 58 posts · 8 votes
    10y

    Wow great Job! Looks great. Very inspirational story. You took action and you came up. Must feel nice to have a flip under your belt now. The 25k must be nice but I bet it was the learning experience that made it all worth it! You could have easily gave up because everything was going downhill as it seemed. But like you said, persistence is what kept you going. Very cool man! Keep up the good work.

  • Rental Property Investor · San Antonio, TX · Member since 2011 · 266 posts · 158 votes
    10y
    Matthew Rembish congrats on your first flip! The place turned out great and you still made money with all the challenges you faced. Great job! What's next for you? Are you still primarily using an agent to find the next deal? I hope you're sinking your profit right back into your business, it's sure to pay dividends! Post more pics, it's always cool to see the transformation. Take care, -Andrew
  • Brick, NJ · Member since 2016 · 41 posts · 26 votes
    10y
    Awesome work, house looks beautiful! Congratulations on a successful first flip! May I ask what town this home is in? I'm right next door in Brick, where I am under contract for my first rental property myself.
  • Investor · Fort Lauderdale, FL · Member since 2015 · 172 posts · 30 votes
    10y

    @Matthew Rembish congrat's sir on taking ACTION and getting it done! Nice work as well. Keep up the great work, can't wait to see what else is in store for you.

  • Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
    10y

    Congratulations @Matthew Rembish and amazing work!

  • Investor · Milwaukee, WI · Member since 2014 · 69 posts · 13 votes
    10y
    Im 24 bro looking to do my first flip next year or at 26 . The pics look great . 25k is nice profit for your first time .. Wishing many more for you
  • Specialist · New York City, NY · Member since 2016 · 97 posts · 24 votes
    10y

    awesome stuff!! love it. keep sharing the stories and make a blog about your daily process and when you read it in the future it will show you the evolution of your thinking and things to remember and learn about. **** I can see alot of viewers/readers tuning in to see whats going on!

  • Boca Raton, FL · Member since 2015 · 13 posts · 0 votes
    10y

    Congrats!

  • Real Estate Agent · North Jersey · Member since 2016 · 76 posts · 29 votes
    10y

    Congrats! What town is this in? 

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Alex Sanchez

    Thank you for the kind words, Alex. It was definitely a handful but was a pretty amazing experience.

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Andrew K.

    Hey Andrew, thanks a lot! I definitely plan on doing more flips, but I'm probably going to bring my dad in on the next one as this is something he's been interested in. I'd like to get into multifamily rentals next and eventually storage facilities (which is my ultimate goal). For now though, I'll probably have to keep my civil engineering job...

  • Grayslake, IL · Member since 2016 · 8 posts · 1 vote
    10y

    Congrats, this is truly inspirational. Let us know how your next flip goes. :-)

  • Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
    10y

    Great job and great post! very inspirational :)

  • East Orange, NJ · Member since 2016 · 10 posts · 1 vote
    10y

    @Matthew Rembish Great job! What town?

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Evan Ventura

    Hey thanks, Evan. The property is actually in Forked River, I've been looking a lot in that Lacey Township area. Good luck with the rental!

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Courtney Merricks

    Thank you very much, Courtney! I really appreciate it!

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Odie Ayaga

    Thanks, Odie!

  • Keyport, NJ · Member since 2016 · 8 posts · 1 vote
    10y

    Congratulations @Matthew Rembish! Great job and good luck on the next!

  • Jersey City, NJ · Member since 2016 · 43 posts · 9 votes
    10y

    Nice job..

  • Real Estate Agent · West Hills, CA · Member since 2016 · 43 posts · 26 votes
    10y

    Congrats! House looks Great! Nice work

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Nolan Gray

    Thank you, sir. Good luck with your first!

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Kedian Jimenez

    Thanks, Kedian! That's funny, I was actually thinking about doing that.

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y
  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Christie Duffy Thanks Christie! It's in Forked River, are you familiar with the area?

  • Flipper/Rehabber · Toms River, NJ · Member since 2014 · 378 posts · 154 votes
    10y

    @Lou Veres Thank, Lou! I definitely will. This is only the first chapter!

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