Found my first flip

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Found my first flip

Glen FitzmauricePro Member
Member since 2008 · 40 posts · 15 votes

Man did I find a deal. A cape built in 1900 that has had a new basement poured and a new 200amp electrical service.

It needs a new kitchen, 2 bathrooms, the entire upstairs is empty to the studs, the downstairs needs to be sheetrocked, some remodeling downstairs. Not long ago the house was jacked and leveled.

I've had a couple friends that have been flipping for years look at it and they both come up with a price of $35-$40K to fix it up.

There are some legal issues that have to be addressed first cause there are a bunch of heirs to the property.

With that said the price on this house is....are you sitting down???

$10,000!!!!!!!!!!!!

Another big downside is that the neighbors house is a !@#$%^ pigstye. However that house is on borrowed time and I'm pretty sure isn't going to be around a whole lot longer.

If I waited for that house to go away (5 years or less) my flip would go from a finished value of about $80K to around $110,000.

But I really don't want to wait on this. I'd like to buy it, fix it, flip it and move on.

I'll try to get some pics and video so you can check it out.

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  • Paul Cordero
    Scottsdale, AZ · Member since 2008 · 342 posts · 15 votes
    18y

    Not trying to rain on your parade here, since this is your first potential flip...but this sounds like a lot to take on for your first flip. I don't doubt your experience in construction/rehabbing because you may be seasoned, but I think this might be a potential flip nightmare.

    That is a great price for a house that has had so much work already, but it doesn't make sense to me. There seems to be a catch here or someone is taking a huge loss for no reason which doesn't happen very often.

    I would keep it simple for your first flip. Then when you get the timeline, and budget under control, try something a little harder. Build your experience before taking on a flip that needs so much work.

    If you decide to go through with this flip, please let us know how it turns out. I would love to hear how everything goes.

    May God be with you in all of your endeavors.

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  • Account Closed
    Real Estate Investor · Fort Wayne, IN · Member since 2008 · 424 posts · 5 votes
    18y

    I strongly agree with RoyalT. I made the mistake of taking on a major project early on and it kicked my a$$! I didn't make any money on it, I was completely stressed out and in way over my head. On the positive side I did learn a lot from the experience on things I would never do again! Either way good luck with whatever you decide to do!

    Jared

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  • Account Closed
    Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
    18y

    Jared,

    Sounds like you signed up for the accelerated learning program! I am glad you survived and can continue.

    John Corey

    Originally posted by "BlueStarHomes":
    I strongly agree with RoyalT. I made the mistake of taking on a major project early on and it kicked my a$$! I didn't make any money on it, I was completely stressed out and in way over my head. On the positive side I did learn a lot from the experience on things I would never do again! Either way good luck with whatever you decide to do!

    Jared

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  • Peter Vekselman
    Real Estate Coach · Atlanta, GA · Member since 2008 · 80 posts · 5 votes
    18y

    This sounds like a house you just may want to buy and wholesale to an investor without doing anything to it. You may just want to make the purchase for the 10K and then sell it for about $15k.

    Another option would be to flip your contract and pick up a few thousand that way.

    Both of these options would keep you away from a potentially huge construction headache.

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  • Giancarlo Lavini
    Homeowner · Waltham, MA · Member since 2008 · 8 posts · 0 votes
    18y

    Whereabouts in maine?

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  • Account Closed
    Real Estate Investor · Fort Wayne, IN · Member since 2008 · 424 posts · 5 votes
    18y

    So what's the word CBR? Did you end up pursuing the property??

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  • Glen FitzmauricePro Member
    OP
    Member since 2008 · 40 posts · 15 votes
    18y

    It's definitely a big project. No question about that. There are several reasons that it is so inexpensive. First and foremost there are alot of heirs to the property. Most of them have signed off...but not all.

    Talking with the attorney that is handling the estate he informs me that I'm going to have to spend some money with another lawyer on "an action to clear cloud" (whatever that means) to get a clear warranty deed.

    But I figure even if it runs me 5K to get a clear warranty deed it's still well worth it.

    Once I am SURE that I can get a clear warranty deed I'm going to buy the property, and I'm going to see if I can find an investor that's willing to buy it from me with my intentions of making a quick $10K.

    If that doesn't happen then I'm going to start rehabbing it. Even if it does run me another $40K I'll still only have $55K in it and the comps are conservative at $100K.

    I'd be happy to sell it at $80K and walk away with approx $20K afer everything is said and done (I realize my numbers might be a little off and I'm still ok with that).

    Anyway, check it out...

    http://www.youtube.com/watch?v=sfIz4VYZn2E

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  • Glen FitzmauricePro Member
    OP
    Member since 2008 · 40 posts · 15 votes
    18y
    Originally posted by "charles whitaker":

    BTW, what are you spending 40K on, that sure is alot of money to go into a house and I know that sheetrock is not very expensive. I typically spend more than other investors in town on my rehabs but I feel that I make my houses slightly nicer than the rest, my average so far is around 15K on a house. That includes partial sheetrock, vanities, kitchen redo(maybe cabinets), texture, paint, crown, fixtures, electrical fixes, etc.

    Most of the house needs sheetrock, the kitchen has to be completely redone, it needs at least one bathroom (but it will be WAY more marketable with 2), it needs ALOT of remodeling thru the entire house, it needs all new windows, a new roof, a new furnace, the upstairs is nothing but studs, it needs to have some fill brought in, there are two trees that have grown onto the roof and the whole house needs to be sided.

    Phew. Quite a list huh.

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  • Glen FitzmauricePro Member
    OP
    Member since 2008 · 40 posts · 15 votes
    18y
    Originally posted by "charles whitaker":
    Pretty good list. What size is this house? Also, when you say that it needs bathrooms, are they just demolished to the studs or non-existent? Depending on alot of unknown factors it looks like a 25-30k rehab, size being the main factor.

    The title problem requiring an attorney sounds like something that the title company can clear up easily without much money if any at all. I don't know the history of the property but it is probably just a matter of clearing everybody's name (heirs) from the property deeds.

    I haven't measured it but it's safe to say that it's about a 35' by 30' cape.

    There is one bathroom downstairs that opens up right into the kitchen (yuck) and it doesn't have a tub.

    I have an appt next Tues to sit down and talk with a lawyer about the remaining heirs.

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