All Forum Posts by: Chris Eley

@David Faulkner Yeah, I definitely considered doing the BRRRR method, but it just didn't make sense for this particular property due to the 2 extremely old air conditioning units on the home (probably $9-10K in capex). It would definitely take a while to recoup those costs, considering the lower rent in the area. That, and I'd rather not rent a property with a brand new kitchen in it - just my personal preference.

@Tony Wooldridge Thanks Tony!  I don't have the next one lined up quite yet, but the next mailing campaign starts tomorrow...1000 letters going out! 

@Robert Burgess  Ha yeah the wetbar was pretty crazy!  I probably spent $2-3K total in marketing before finding that deal.  Of course that included things like setting up my website, business cards, and other initial marketing expenses.  I was pretty fortunate though that this deal came from my first round of mailings to this list. 

@Robin Boyer Sounds like you're off to a great start!  Surrounding yourself with a great team is paramount! 

@Michael H.  Yeah, there were definitely more fixes than what I had listed - the more expensive things included a new roof $7K, relocation of the laundry room inside $3K, plumbing leak in the main bath (cast iron piping was a pain) $1K, and removing the wood paneling and retexturing/re-drywalling a large portion of the house $2K.  Then $7K kitchen, $5K bathrooms, $6K floors, $4K paint/baseboards, and the rest was misc repairs and holding costs.

  @Susan Knight Thanks Susan!  I just built a list from ListSource for out-of-state absentee owners for specific zip codes in Phoenix.  I narrowed it down to an area that I knew was super hot and was relatively cheap to buy. 

@Robin Boyer I usually do not use an attorney, but I am very familiar with all of the contracts and paperwork involved in buying and selling houses.  I'm sure as the deals get more complex, I will have to reach out to my attorney more often.  

Sorry, I meant my first flip that I didn't live in...the wife was getting sick of moving every two years haha. The other houses weren't really meant to be flips, they just ended up being "accidental flips". Being the deal finder that I am (i.e. cheapskate), the first house we bought was a foreclosure and the 2nd and 3rd were both rentals (absentee owners). And we like contemporary finishes in our homes, so we always preferred beat up houses that we could renovate anyways. On our first house, we had to get creative with financing since we didn't have the cash. So we used an FHA 203K loan to finance the repairs/remodel for the property. Live-in flips are a great way to get started, and you don't pay tax on the gains after 2 years of living there, which is amazing!

@Caleb Rigby  Thanks!  I ended up going $3K over budget, so nothing too crazy.  I definitely over-improved the house for the area, so that probably was the difference right there (that was one of my lessons learned from this flip).  And I definitely will begin wholesaling, as I probably only want a maximum of 2 to 3 flips going at one time.  

Thanks for the compliments, guys!  

@Daniel Lehrman  The house was in Alhambra, off 35th Ave and Indian School Rd...crazy hot area right now with Grand Canyon University really taking off.  I probably did 25% of the repairs, while sub-contracting the rest of the work out myself (versus hiring a GC).  In retrospect, I probably should've hired a GC with this large of a project but it was so hard for me to accept paying an additional $5-10K to use a GC.  For the next flip, I'll definitely take the more passive approach and hire a GC, so that I'm not at the property doing work and can focus on generating more deals.

@Sawyer Burnett Fortunately, I had enough cash on hand.  I had saved up for a few years and also did pretty well on the previous live-in flips.  

@Account Closed  Thanks Ray!  I had bounced around a little on the first mailing campaign, going from probates to different absentee owner lists to see what worked the best.  I probably sent out total 3000 pieces before landing this deal, both postcards and professional letters (typed).  Response rate was pretty low overall (1-2%), but I think this is just due to all of the competition in the Phoenix market.  I just passed on the other deals, and other investors bought them up.  Next time, I will definitely look to wholesale some deals. 

Pics or it didn't happen!  Right?  :)  For your viewing pleasure - 

Hey BP!  I just wanted to share my experience on my first flip in Phoenix, AZ!  When I say this is my first flip, this isn't counting the previous live-in flips that I had previously done (which was fantastic for learning the whole process btw).  Anyway, here are the details -

Purchase Price $62K

Rehab (including holding costs) $43K

List Price $175K

Sale Price $174K

Net Profit (after all commissions, closing costs, etc) $59K

I had found this deal by doing my own direct mail marketing campaign, which took a few months to get the right deal.  I was very picky on this first one because I wanted a "slam dunk" for my first one, with very little risk of losing money.  Unfortunately, I probably passed up a couple of other deals because of this, but am definitely ready to take on more risky flips in the future. 

The house was a pretty standard flip - 1730 sq feet, 3 bed, 1.5 bath.  Needed all the usual cosmetic upgrades - kitchen, bathroom, flooring, paint, etc.  The only downside was that the house was built in the 1950's with an addition built in the 70's.  So this meant spending $ modernizing the place, including filling in a sunken wetbar in the main living room that was straight out of the 70's! 

The rehab took about 5 months from beginning to end, but I definitely was slowed by my "real job".  Probably should've only taken 2-3 months to finish.  I listed the house myself, through a flat list agent, and got a crazy response in the first weekend - 9 offers, with 7 over asking price!  I never imagined to have that good of a response, but apparently sub $200k houses in Central Phx are selling like hotcakes.  After inspection, we ended up renegotiating for the two 20 year-old air conditioning units on the house, which I was okay with.  I figured comps wouldn't come in much higher anyways, which was right on with my asking price (appraised at $175K).  Nailed it!

There were definitely a few things I did wrong which unfortunately cost me $, but I'll mark it up as"educational expenses".  This post is getting pretty long, so maybe I'll save those tips/lessons I learned for another day.   

Lastly, I want to give a huge shout out to the BP community!  For about a year, I lurked on these forums and listened to countless podcasts that really gave me the confidence to start this journey.  Thanks everyone!  Now it's time to find the next deal!

Hi Don,

My experience has been to at least use the last name of the person you are sending (or full name if formatted correctly).  I felt like the chances of getting a mail piece returned to me were higher when I left the person's name completely off.  But I also use mostly yellow/professional letters though, not sure if that has any impact on that.  If it saves you time to leave them off, you could always do a smaller test run to find out.  You could also just put "Current Resident" or "Current Homeowner".

Thanks guys!  Any investors from Phoenix, AZ out there?  Looking to meet up with any investors/rehabbers in the N Phoenix/Scottsdale area.