My First Flip! With Numbers and Photos!

My First Flip! With Numbers and Photos!

Pensacola, FL · Member since 2017 · 163 posts · 312 votes

I realize I do not have a ton of posts here on Bigger Pockets, but I can’t emphasize enough the impact BP has had on me in a short time.  In the interest of community and sharing success stories with others that might be looking for some motivation, I wanted to detail my start in RE.  I’ll try not to be too lengthy, but I think people can identify with these stories a little better when there is some personal context.

My name is Ben Ervin and I am a Program Analyst for the Naval Education and Training Command in Pensacola, FL.  I enjoy knowing what I do is impactful and supports the Sailors that serve our country.  But, I have always had an attraction to the idea of entrepreneurship.  I’ve known since I was 13 years old that I wanted to be my own boss one day.  Yesterday marked a big step towards that goal when my wife and I listed our first flip property on the market.

In October of 2017 I decided to stop thinking about flipping houses and start educating myself on how to get in the game.  I found that a friend of mine, @Nick Armstrong, was flipping houses and got a chance to talk shop with him a bit and he directed me here to BP.  From that point, it took me 4 months to close on our first deal.  It hasn’t sold yet, but we are in a hot market right now where I believe data supports a high demand for the product we are offering.  Beyond all of that, the really invaluable part of this experience has been education.  I have learned A TON.  We certainly made mistakes along the way, but I can take those lessons learned and leverage them going forward.  I intend to use this first deal as a launching pad to doing more deals, including additional flips in the near term with the goal of building a rental portfolio for long term passive income.

Now I will stop rambling and show you what we’ve done.  The house has not sold yet, but assuming full price offer, here is the breakdown by the numbers along with (everyone’s favorite part) photos.

Projected Numbers:

Acquisition Costs (AC): $70,635.50

- Purchase Price: $70,000

- Closing Costs: $510

- Termite Letter: $125

Rehab Costs (RC): $41,185

- Materials: $21,780

- Labor: $19,405

Holding Costs (HC): $870

- Utilities: $450

- Insurance: $420

Selling Costs (HC) *Assuming Sales Price (SP) of $175k*: $10,500

- Commissions to Agents: $10,500

Projected Profit: $51,810 – Taxes & Any Additional Selling Costs

- $175,000(SP) - $10,500(SC) - $870(HC) - $41,185(RC) - $70,635(AC) = $51,810

Now on to the photos...

Exterior Before:

Exterior After:

Interior Before:

Interior After:

I still have a ton to learn, but I look forward to trying to answer any questions you might have. Furthermore, if anyone here in my local market wants to just say hello, I invite you to do so. I hope to be more involved in the BP and larger REI community as a whole going forward.

Thanks for listening/checking out my progress so far and good luck to all!

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James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
8y

@Benjamin Ervin - Can you share the scope of work? Looks like you got a lot of work done for $41k...either that or my construction cost are really just that much more expensive up here in the Northeast

See this reply in the discussion

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  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Rose Walters:

    Congratulations!! You did a super job for your first! Did you most of the work yourself? Continued success.

    My group and I are doing fix and flip in Jacksonville, FL, and we are on our 4th, so far so good. Like someone else mentioned, there is more funding than properties that meet our criteria. Competition is fierce, but that's what make it exciting for us.  

     Thanks, Rose.  We did do a good bit of the work ourselves.

    Jax certainly interests me as a market for flips.  My brother lives in Jax and is considering doing a house hack when his current lease is up.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Yehuda Smith:

    @Benjamin Ervin 

    Firstly great job. Did you leave the popcorn ceiling in place and just cover it with the boards?

     Yehuda, we actually began removing the popcorn with the intention of doing a knockdown texture.  But we felt the quotes we received were a little high to apply the knockdown when considering it wouldn't be a feature item.  For about the same cost (with our labor though, of course), we now have a plank ceiling that has gotten REALLY good feedback from folks who have viewed the house. 

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Imelda Interino:

    Great job on rehab!! Just curious how you got the profit of $51K+ after I calculated your acquisition cost, plus rehab and commission fees you're not really gonna get a lot from $175K sale price.  I am a Realtor and investor and you may have also missed the closing cost fees, good luck and hope you can sell it more than $175K.

     Imelda, if you look at my original post, you can see I have already subtracted $10,500 (assuming $175,000 sale price) for commissions in getting my final projected figure.  You'll also notice my final projected figure does not say $51K+, as you've stated, but rather it reads like this:

    $51,810 – Taxes & Any Additional Selling Costs

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Savannah Coyle:

    Hi Ben,

    Great job on the rehab! My husband and I just finished our first remodel a few months ago as well. It's a rewarding process. Yours definitely is in a higher class than ours is as far as quality, although in our defense ours was a BRRR rather than a flip and we now have it fully rented out.

    Do you find that rehabbing properties like this one that require more cosmetic appeal to be a good way to go? Our property required quite a bit of contracting work in the way of plumbing, electrical, and roofing. 

    Thanks for sharing!

    Savannah

    Hi, Savannah.  Congratulations on taking down your first deal!

    As far as your question goes, I don't really have a solid data point to say yes or no until the house sells.  Even then, I would submit there should be a pattern of success over a significant enough period of time to really determine whether or not this business model works.  My only comment would be that we did not intend to sacrifice critical functional needs the property had in favor of using more funds in the cosmetic areas.  I believe that would be a recipe for disaster long term in a business where your name is everything. 

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Bernie Day:

    May I ask, "how did you obtain this lead, i.e. what marketing did you use?"  What financing?  And did you retain an interior designer or was the "new Look" yours and your wife's creative tastes?  Looks great!

    Bernie, of course! We have not begun marketing in any way other than communicating our goals in REI and criterion for leads to agents and wholesalers in the area. I suspect we will have to develop a marketing plan moving forward as deals are scarce. Our idea was to get one under our belt to put a little weight behind our name and show the real players in the area that we are serious, and here to stay.

    Financing has been addressed, but this thread is getting pretty big so I'll restate.  We put together a sample deal package after analyzing a number of leads and took it to literally the only person in my life I knew was an investor.  And I use that term loosely.  He is really more of a person I knew had strong personal finance practices his entire life.  I approached him with the intention of getting feedback on my plan and he actually decided he wanted to be the one to get us started.

    In terms of the design, this was ALL my wife.  I have an okay eye for this stuff, but her taste is very good.  I've always said the only difference between her and Joanna Gaines is resources and a camera crew!  She thinks that is crazy, but I truly do believe she gives us a competitive advantage with her ability to find excellent value for materials that people love.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Peter Clapham:

    Like it. Owned a condo behind Cordova Mall that I bought new when I was stationed at NASP and sold it 10 years ago. Miss the area. What part of town is your house in?

     Hey, Peter. That area has really grown up.  Between Bubba Watson, the Studer Group, and Navy Fed, Pensacola's economy has been heading in the right direction since about that time.  This house is north of Cordova Mall, close to Scenic Highway, if you're familiar.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Bryan Lutz:

    Good job!  Where did you source your cabinets and counter tops? Ikea?

    We are doing a rehab/flip now with more basic interior styling and have sourced from Lowe's and a local granite dealer.      

     Hey, Bryan.  Yes, the cabinets and white countertops are both IKEA.  I highly recommend them for the price.  Certainly more work to put them together, though.  I got the Butcher Block from our local Lumber Liquidators.

  • Versailles, KY · Member since 2018 · 2 posts · 1 vote
    8y

    Great job on the numbers and the work!  Congratulations, my friend!

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @James M.:

    Ben, that looks amazing. You did a great job. How did you find a contractor to do finish work of that caliber for 41k? That is a lot of god damn finish work!

     James, I actually did most of the trim work myself. That said, we have a really good carpenter who we intend to use going forward.  As we continue to scale, I'd like to somehow arrange for him to get his GC.  I like the idea of funding that for him with the intention of bringing him on to run all of our rehabs.  He's that kind of a guy.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Tamela Ekstrom:

    The finishes are perfection!  Did you have a designer help you choose?  Everything from windows to flooring to tile to lighting is A+++. 

     Thanks, Tamela! No, we didn't use a designer.  That was all my wife.  I married well!

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Beibei Lin:

    Ben,

    Congrats on your first rehab. I've been wanting to start in the RE business myself, but always hesitant due to fear of mistakes. Any pointers for a first timer?

     Beibei, get educated and get started!  It is the fear of not getting started that drove me to take the plunge.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Vicki Violet:

    LOVE the painted brick..Love the higher grade finishes and upgrades! You did this 'right' and it's what buyers are looking for. Are you going to stage it up a bit? I've actually used some of my own furniture to stage a project house with and it pushed the interest up quite a bit as it gave the buyers more of an idea how furniture and decor can look...(kept it trendy) xo

     Thanks, Vicki!  We actually did use some staging materials (fireplace mantle, dishes for the glass cabinets, etc.)  I think it makes a huge difference for virtually no cost.  We might consider a larger stage if the house doesn't sell, but we are generating a lot of interest so far, so I am trying to stay patient.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @David Sicherman:

    Wait, you didn't close yet?  Not to crap in anyone's hat, but I would wait to post results until after you close.  Having closed many properties things can change wildly while waiting for that first closing lol.

     I would hardly call my post "results".  I used the term PROJECTED figures purposefully.  I understand we have a long way to go before getting to the closing table.

  • Pensacola, FL · Member since 2017 · 163 posts · 312 votes
    8y
    Originally posted by @Bill Muchow:

    Ben, awesome job! I noticed the ceilings immediately and want to incorporate a similar look, what material did you use? (is that painted pine 1x6's, hardiboard, ?)?

    Fantastic first deal!

     Hey, Bill.  We used painted pine boards for the bedroom ceilings and hardi for the planks.  I highly suggest using a good primer before painting.

  • David SichermanPro Member
    Vendor · Lake Worth, FL · Member since 2014 · 713 posts · 149 votes
    8y
    Originally posted by @Benjamin Ervin:
    Originally posted by @David Sicherman:

    Wait, you didn't close yet?  Not to crap in anyone's hat, but I would wait to post results until after you close.  Having closed many properties things can change wildly while waiting for that first closing lol.

     I would hardly call my post "results".  I used the term PROJECTED figures purposefully.  I understand we have a long way to go before getting to the closing table.

    ok I think most people are reading it as "results", I know it wasn't on purpose, no matter the results, I like the styling of your rehab with the exception of the wood posts in front being unpainted lol.  Hope it closes with ease and you make your projected profit.

  • Westerville, OH · Member since 2018 · 35 posts · 21 votes
    8y

    Looks great! 

  • Realtor · McKinney, TX · Member since 2018 · 60 posts · 10 votes
    8y

    Very nice finish out. It's the small details of each space that add up to an overall vision, which y'all knocked out of the park. Good work

  • Member since 2018 · 1 post · 1 vote
    8y

    Great Job! Please post a Q&A as everyone has already asked all the questions I wanted to ask...Thanks alot😊

  • Rental Property Investor · Cleveland, OH · Member since 2017 · 18 posts · 3 votes
    8y

    Man, you did great!  Nice work on everything exterior and interior.  You may have posted it earlier, but what contractor did you use?  Hard money or private money?

  • Rental Property Investor · Miami Beach, FL · Member since 2017 · 105 posts · 59 votes
    8y

    Great rehab! Beautiful project. And great numbers! Thank you for sharing. 

  • Santa Maria, CA · Member since 2018 · 22 posts · 13 votes
    8y

    Hi Benjamin Ervin

    I have a couple questions for you, I hope I'm not repeating any questions that have been asked before.

    1) What kind of material did you put on the ceiling?  It looks like you went from popcorn to laminate? is that similar to laminate flooring?

    2) You mentioned in one of your responses that you got your funding from a family member.  Did you pay any interests for the funds? or did you share your profit with that person?

    Great job on the remodeling, keep it up.

  • Raleigh, NC · Member since 2018 · 1 post · 1 vote
    8y

    Congratulations..The house looks great.

  • Contractor · Bend, OR · Member since 2018 · 33 posts · 12 votes
    8y

    That’s awesome! Congratulations!! The interior looks great!

  • Rental Property Investor · Wakefield, MA · Member since 2015 · 30 posts · 21 votes
    8y
    Looks great! Congrats on a successful job, well done!
  • Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
    8y

    The design is BEAUTIFUL!!! I am using that same rectangular sink for my powder room at home :) Well wishes on a quick sale of this home so you can move onto bigger flips and REI endeavors ;)

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