All Forum Posts by: Andy Robison

What is the market like? 

That is the only question you should be asking. Is carpet the norm? do you command a higher rent price for laminate? Cost difference? Carpet replacement is easily written off in taxes and using deductibles.

That being said if its a toss up I'd go with a GOOD laminate flooring. It really is less of a headache.

@Michael Wentzel

Any time. Once this next house is sold, I'll post up another Lessons learned. Or a diary of the flip... I think if I can remember to take photos tonight I'll keep a running post.

If her thought process is to not pay rent tell her no rent is still due, and security deposits are to cover damages. If rent is not recieved on the day its due, you will file an eviction and see it through.

I plan on it. Thanks for the words of encouragement all. I've got a housing inspection today and if all goes well... I'll be flipping another house and have it sold by the end of May.  I'll post up some before and after shots.

Yep, lower end I'd agree. This was in a middle class suburb of KCMO. I'll never invest in a lower end area of the city again.... just ugh... no... nope... not for me. To much of a headache. 

Which is why I'll only install PEX now. Copper is worth to much to some people. 

 Great area, good schools, last reported crime was a hit and run of a parked car several months before I purchased the house in a 5mi radius. Perfect first home for a family.
Sometimes you just get the short end of the stick. It takes all of 5 minutes to take a condenser. Neighbor is a fire Marshall, and the guy across the street is a police officer for 20years. Quiet area, just bad luck sadly. :(

I had actually underestimated what closing costs were going to be. In my market it appears that having the seller pay all closing costs is normal. Did not expect that, did not even think about checking that.
That and what I was told was a good roof by the home inspector the lady we sold the house to said the roof was old and needed to be replaced. Thats where I lost a good chunk of money, new roof. Pulled old permit, it was 9 years old.

I financed the house through a local bank, 20% down 80% financed interest only for 6 months. at 5% with a 5 year balloon. My plan B was to turn the house into a rental if it did not sell and rent for $1800/month until it was seasoned and then convert it to a 30year fixed at 4% and pull the cash out then.

Cant say much about what impact the car loans will have vs what has already been said.

However if you are looking for something to drive around that has a decent hauling capacity, Look at the older CRV's. I'm driving a 2001 CRV with close to 300k miles. Thing is amazing and gets 28mpg city.

Well I've been quiet for a while in these parts. Jumping through several jobs while trying to maintain Real Estate has been a challenge eventually had to step back from trying to grow. End of last year I was bored collecting rent from the two properties that I have bringing in a whopping total of $1200/month cash flow. Not nearly enough for me but it was nice to have it, while various contracts that I was picked up on were canceled or short terms. So that brought me to the path of I wanted to flip my first house. I need more capital if I want to expand my buy and hold side of the house so...
So I found the first property that would be a good first flip.... Boy was I wrong (kind of). Lets get into the numbers and my mentality going into this property. Purchase price was 60k Purchase, 40k rehab and I estimated 150k ARV.
Numbers look good right? 50k profit, lets do paper napkin math and say 30k after holding costs and other things that were more expensive than I thought.
Where everything went wrong.

1) Contractor
During this flip I worked with a contractor that was suggested to me by another investor in the area for quality of work and speed that he was able to do said work. I had spoken to past clients, did my due diligence or so I thought. Was given a 45 day max timeline for the work to be done, kitchen bathrooms, flooring, paint and plumbing work. 45 days quickly turned into 75... Holding costs climbed, rehab budget ballooned from the original 40k rehab went north of 50k. Still enough meat on this bone to make it worth it, especially for my first flip. 

Lesson 1. Stay on top of your contractor.

2) My numbers.
Even after everything was said and done and headaches that I had with the contractor. In all the numbers I had I missed one very important thing closing costs. Those quickly add up, I mean really they add up. (lesson learned) Then there were small things like repairing a fence. Contractor quoted me at $2000 for that. Ended up doing it myself for just shy of $800 plus a few weekends. Just a bunch of small things added together $100 here and there... the AC stolen during rehab.. I did not keep track of my numbers close enough.

Lesson 2. Track all your numbers. Big spread sheets, everything keep track of it and review it every day.

At the end of the day I could have done better. I learned a bunch doing this and my grand vision of having an easy 30k to spend on another flip+buy/hold did not pan out. I ended up around $10k profit for this house, set the market price for the neighborhood and fixed up an abandoned property and sold it to a wonderful family for their first house.

Lesson 3. Real estate is a constant education, any education that pays you is worth the time invested.

I did not make a ton of money on this house, but for a first flip that I learned a lot on, took some lessons from and a little bit of cash. I am now better suited to flip my next house. Which I've got to go and give my earnest deposit check here in 10 minutes.

Happy Investing everyone!