My first (current) house flip to free up $ for investing

[Jon Elson]

Here’s how this adventure started… I am a home owner and planned on purchasing a multi family, renting out my single family house, and starting my passive career in real estate. The funds I planned on using as a down payment on my second property did not come through as planned, so I plan on flipping my current house. I am a CPA with a full time job and good credit.

Facts ($’s are approximations):

Home was built in 1959

Home has been owned 2+ years (tax free gain on sale)

Purchase price + landscaping + master bath: 180K

Appraised Value: 195k

ARV: 230 – 250K

Repairs:

• Refinish hard wood floors

• Paint

• Kitchen: Cabinets (refurbish used?), take out tile/replace with hardwood, countertop, open wall to living room (Just a window, not a wall demo as its load bearing), and new (or used) oven

• New interior doors

• Bath: Tile, vanity, countertop, toilet, reglaze tub

• Light fixtures, vents, plugs, switches

• Staging

• Potential updated electrical box (currently in good working condition)

• NEW LARGE window in living room

Investment

180K current

20K rehab

20K & closing costs realtor fees

220K Cost

There appears to be a possible 20K gain on my primary residence, this would free up approx. 30 – 50K cash to be used to jumpstart my real estate investing career.

I have not gotten quotes on the repairs yet, this is what scares me.If repairs end up costing 40K, it could eliminate the entire gain and I would be better selling now to pull the cash out.Please provide any and all thoughts/advice you may have regarding starting my real estate career.

Thank you in advance for your response!

Jon