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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  • Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Matthew Rembish Looks really good.  Nice job!  Did you keep  track of how many hours you put in?

  • Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    10y
    Yes! Looks so good
  • Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
    10y

    @Matthew Rembish Congrats on your first flip. Nothing you can read will ever prepare you for your first experience. Glad to see you made it out in the GREEN

  • Garfield, NJ · Member since 2016 · 26 posts · 8 votes
    10y

    @Matthew Rembish - First of all, you're my hero brother, congratulations...wish you to the best with future REI endeavors. I am curious like @Christie Duffy about NJ city where this amazing rehab took place.

  • Investor · Brentwood, TN · Member since 2015 · 32 posts · 2 votes
    10y

    Great job, and congrats!

  • 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.

  • Investor · Downers Grove, IL · Member since 2015 · 1k+ posts · 955 votes
    10y

    very nice! Congratulations on a successful flip and the ability to find funding and tackle on issues when they appear.

    Like you said, the lessons are valuable. Nothing that a guru or a book can tell you. 

    Best of luck to your investing! Looking forward to seeing more success stories from you.

  • Houston, TX · Member since 2015 · 29 posts · 10 votes
    10y

    Congrats and keep going! 

  • Investor · Marshall, VA · Member since 2015 · 87 posts · 24 votes
    10y

    @Matthew Rembish,  Awesome.  Great job!

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

    @Lou Veres Thanks, Lou! I definitely will!

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

    @David Zheng Thank you, I really appreciate it!

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

    @Darryl Scipio Thanks, Darryl! It's in Forked River.

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

    @DeVonn Smith Thank you! Looking forward to jumping back in!

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

    @Corey Brown Thanks!

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

    @Jason Franklin Thank you, Jason! I really appreciate it!

  • 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

    @Larry Turowski Thanks, Larry! I kept track of every penny spent but not the time. I feel like if I kept track of the time, I would have seen at the end that I probably would have made $0.50 an hour haha. But now that I know how this whole process works, I definitely plan on streamlining it and making the next one faster.

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

    @Ryan Cameron Thank you, I appreciate it. And I agree 100%! I've probably read 20 or so books but the actual experience taught me more than all of them, combined.

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

    @James Chung Haha thank you, James! I really appreciate the kind words and best of luck to you as well! The rehab took place in a town called Forked River. It's where I've been primarily looking since my hometown is a little too expensive for me to invest in. At least at this time.

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

    @Hozan Barwari Thank you very much!

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

    @David Dachtera Wow, that is really great advice! Thank you very much, David! I'll definitely try that on the next one with a similar situation. When it first happened, it was a pretty terrible feeling but looking back now, I wish I had a picture of the face I made when I turned the water on at the street and heard all of the pipes bursting in the crawlspace. Would have been priceless haha.

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

    @Chris T. Thanks, Chris! I appreciate it! My biggest hurdle was patience, which I learned a lot about through managing this. Nobody can teach you that in a book.

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

    @Sharon Carter Thank you! And I definitely plan on it!

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

    @Dan Call Thank you very much, Dan!

  • Stockbridge, GA · Member since 2016 · 13 posts · 2 votes
    10y

    Awesome! This is very encouraging for a first time flipper like myself! I'm currently seeking my first flip project! Wishing you many more successes! Please share

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