Livonia House Flip #1
I spent all of 2014 and half of 2015 learning and prepping my self mentally to take the first step into real estate investing. Finally in late 2015 i set up my business entity and sought out for fix & flip deals. My analytical nature allowed me to create quick scenarios for a calculated risk.
The house I purchased was a bank owned property in Livonia. Brick ranch built in the mid 1950s, detached garage, full basement. A high pride of ownership neighborhood like many of the blue collar areas in that part of town.
I did my analysis based on only a drive by, as it was still occupied (even though the bank said it was VACANT!!!) Interior sight unseen as are many foreclosure properties. The purchase price was $87750 and the comps I ran that time were in the $150k's. Anticipating a rehab of budget of $25,000 (based on colleagues of mine experience on ranches of this size in that area) I was ready to hit the pavement.
As I gained entry 1 months after the purchase, I found that the plumbing was galvanized and the electrical service was still on the old style fuses. An unexpected obstacle.
I hired out some of the larger scoped items and did the rest of the work myself. I'm a full time engineer and so I would travel to Livonia from my work in Warren 3-5 days a week. Balancing family, work, and real estate dreams was not easy.
From initial cleanup (hoarder house), to demo, to managing the sequence of rehabbing, there were obstacles. I experienced hiring and firing two subs, translating to time delay due to rework needed. I experienced the hardship of taking on a large portion of this rehab.
The rehab was completed in about 4 months.
The numbers :
Purchase price : $87,750
Retail price after rehab : $160,000 (comps trended up during the 5 months of initial purchase !)
Minus closing costs, rehab, etc. Net take home was $25,500 !
Pretty proud for my very first flip. I'm confident in my analysis and can't wait for my next one and scaling up !!!
Most Popular Reply
Thanks for sharing this detailed experience. It goes to show that the analysis of the numbers and research is really what makes the deal. B/c even after running into some unexpected issues that can be very scary for a first time investor, you came out $25k on top. That is great money, even for 4 months of work. Educating your self on the specific knowledge is key to success. Congrats to you!
I have been preparing and educating myself for the past few months to jump into wholesaling and investing in rental properties. I started my LLC and am planning to hit 2017 running.