My first flip. NIGHTMARE. 60k education!
Investment Info:
Single-family residence buy & hold investment in Whitmore Lake.
Purchase price: $89,000
Cash invested: $60,000
1st flip. Total nightmare!! Had no idea what I was doing, hired bozo's who ripped me off. Learned everything the hard way. Paid too much, got ripped off 20k by a conman "GC", project scope expanded non stop. However, I learned SO MUCH. I ended up doing a large portion of the work myself and am so very excited about how it came out and getting an opportunity to take what I've learned into my next rehab. In the end even with overspending, the house came out beautiful and the rent I'm getting is making it worth the trouble!!
What made you interested in investing in this type of deal?
All the podcasts about BRRRR!
How did you find this deal and how did you negotiate it?
A FSBO sign popped up on a house walking distance from mine. I paid asking price as there was a lot of competition for it and I got emotional and decided I had to have it.
How did you finance this deal?
Private Money short term, credit cards, cash, refi 30 year conventional after rehab complete.
How did you add value to the deal?
Gutted and replaced almost everything.
What was the outcome?
It's worth what I have into it, was not able to pay all of my costs with the refi.
The rent however, is $200 above market rate, so that's been great!
Lessons learned? Challenges?
So many!!
1. Give SMALL JOBS to new people. I signed a 34k contract and gave 20k to a man I didn't know and it was a HUGE MISTAKE. Hire people to do one little task, when they get it done, move to another.
2. Get educated on rehab. Watch youtube vids non stop to get an idea of what needs to be done and how.
3. Don't buy a house that needs tons of work for the first deal. This was a HUGE project and I had no idea what I was doing. If I could start over I'd go with a paint and carpet deal.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Agent - Marilyn Handloser (Whitmore Lake MI)
Oh wow. what an experience. Lots to learn from this experience.
I love it. You have the exact right attitude you need to be successful. Learn from your "mistakes" and apply them going forward. I've always been puzzled by the people who experience failure and then give up because of the failure, when they've actually just climbed several steps up the ladder of success.
@JD Martin agree! Don't get me wrong, it was hell getting through it. Working till midnight after my day job for months on end. However, now that it is done I'm SO EXCITED to get to try this again with everything I've learned. I feel that this nightmare will make me 1000x more likely to win on the next deal. Now if I could just figure out the "deal" finding part of the game... LOL!