Live-In Flip

[Matthew Ward]

I just read an article by Brandon Turner about how to start investing at a young age. Loved it! Total motivation booster!

First flip was a live-in flip which is exactly what I want to do for my first investment to help get my feet wet. I'd be very interested to learn more about this flip, or if anyone has flipped a house they lived in. I would love to hear your stories and any tips you could share!

Thanks!

[Lee Smith]

My first house 20+ years ago was a live in flip. Back then we had to live in the house for 2+ years to beat capital gains( or so I was told), so I would buy and live in them for 2 years... It's not that way anymore.

The big thing is that banks don't want to lend on houses that need work. Also, so many HGTV and DIY channels, that hardly anyone is afraid of paint and carpets anymore.

Most people don't realize that there is hidden costs/holding costs to deal with. I asked a guy the other day.. A house is worth 100k, it needs 20k worth of work, and you want to make 25k after you sell it, so what do you need to buy it for? He took 2 secs and said "55k!" I said, "oh young padawan, let me show you the error of your ways. How about holding costs, agent fees, insurance, taxes, utilities, etc. "

As for stories:
My first house was previously owned by a father and his 30-40 something son. The father passed away, and the son was enjoying the good life of mooching for free. The kitchen was littered with beer cans stacked almost floor to ceiling, and he had a double stack of paper plates he had created a mountain of cigarette butts on. The tar on the walls was so thick you could see where every picture had been hung in the household. I could go into more of the niceties I was confronted with, but this is a family channel. Needless to say my first house was the house I found out about primers on.

I moved in on a Thursday. My dad met me at the house, and we painted one bedroom and the master half bath. While the paint was drying we yanked up the carpets, minor sweeping, and moved all of my stuff into the living room and dining room.. MIDDLE of the room, so as to keep my stuff away from the filth on the walls. Just enough to move in on that first night and not be in total filth. Friday night, my buddies showed up. We ordered up a keg, and we painted the living room and dining room and moved my furniture to correct locations in about 2-3 hours. I never saw those guys work that fast ever again!

This was also the house where I had just finished dryloking the basement, and painting it all. Was down their working out, torrential rain going on outside.. I go to do a squat, and I am standing in a puddle... Turns out the entire back yard tapered to one window. With that torrential rain, the ground didn't absorb the water fast enough so it all rolled down the hill and into my basement window. 20 tons of dirt later I had releveled the yard so that didn't happen again!