Reflections of a newbie investor completing 1st deal

[Mark Caudill]

Hello BP Tribe!

I wanted to express my experience of researching, purchasing rehabbing and selling our 1st of many flips. Hoping this will be an encouragement to those just getting started and hopefully will put a smile on our more experienced peeps as they recall their first deal.

Background

My name is Mark Caudill. I am the president of Arania LLC a remodeling construction company started in 2017.I'm 59, husband of 29 years, father of 5 amazing children. I have sold real estate and have originated loans during my circuitous career. I have been listening to BP for the past 4 years, recently became a pro member (so worth the price for the value).

My sons put up the down payment (15%)and we financed the rest with hard money. 12 mos, 10.75%, int only

Project

After looking at over 276 listing online, 18 showings and commuting 100 miles one way 4 times we settled on our project. Please see the details of deal in my profile.

The project was 1055 sq ft, 2/1 built in 1900. Asking was $65k, we offered $60k and were accepted. Rehab costs were budgeted at $30k though we did go over by $5k.

Rehab projects were as follows:

Outside/ Inside paint, New windows, gutters, electrical, plumbing, new kitchen and bath, refinish floors and add carpet in 2 bdrms and hallway. Replace both doors on the 1 car garage.

Timeline was to be 8 weeks. (it actually took 11 weeks. lol)

Since my youngest is 17 and mom is always home we decided to let me live in the flip during the rehab and commute home on the weekends. This situation worked well for me. I am not saying "do what I did", rather take note of the flexibility we had to accomplish this flip, always be flexible, fluid on how to acheive your objective 

When we were finished we listed the property for $139500, we had an offer for $5000 more 11 hours later. This party changed their mind and the house went back on the market. 1 1/2 weeks later we received another offer again for more then we were asking. The reason for this is the buyer wanted money back, called a concession, for $5000. The house closed on 15May20, 5 months after we bought it. After everybody got paid we netted a total of $28K

Lessons

Here are the lessons I learned during my 1st project:

1 You have to believe in something

If you were like me, pre-project, you are listening to BP and any other "experts", checking out the latest greatest widget software or the newest person touting to make your investing easier (investing in real estate is SIMPLE not EASY). So one day I realized I need to COMMIT to a course of action and not let the fear of making the wrong choice paralyze me. I need to COMMIT to emulating someone else's knowledge and experience to minimize the mistakes I could make. (Success leaves clues-T. Robbins). Based on my background experiences in real estate and construction, the countless hours spent listening to podcasts, webinars, etc had armed me with great info and strategies. KNOWLEDGE IS NOT POWER, APPLIED KNOWLEDGE IS POWER! We will always be growing and learning thru our investing journey, however, many newbies are hoarding information without applying it in the real world thus getting frustrated depressed and all the negatives that come along with inaction. Believe in those who are sharing from their heart that they dont want you to trip over the obstacles they did. There were many times during this rehab that podcasts I had listened to came to mind when encountering challenges. Words of those who had the priviledge to share their knowledge and experience on the BP podcast encouraged me as I worked mostly by myself.

2 Build a schedule and budget, do everything you can to stick to your timeline. Budgets are there to tell you the most effective way to deploy your resources. Upon review, I realized I had procrastinated several times during this project. I procrastinated painting the bathroom ceiling till about 2 weeks before we were done. DO NOT PUT OFF TOMORROW WHAT CAN BE DONE TODAY!

3 Build a network as you set up purchasing and rehabbing and selling your project. I invest in the Pueblo, CO market. when I started I knew no one. My realtor was an accidental dial while searching for a realtor. By the end of my project, I had asked enough people locally that I now have a realtor, home inspector, 3 electrical subs, 1 plumber, 3 HVAC companies, 3 roofing companies and the best priced window company in Pueblo. All I did was ask those I was working with.

4 Take time off. During my time living in the flip, I had not been home in a month. All 30 days I saw no one, talked to no one. I was focused on getting it done. However, there is another side, this will mess with your head. Take time off, recharge your batteries, center yourself. There are no rewards to the deadest most successful real estate investor.

5 Finally, believe in yourself. It is intimidating to strike out flipping a house on your own. For me, superimpose that your family is not only your business partner, but active participants in the project. I was armed with alot of knowledge but I was scared. My family had not studied RE investing so the slightest thing that hiccuped or didnt turn out sent them into a "fear frenzy". So I had not only my insecurities to deal with but my family's as well. Talk about pressure! Here is my mantra for times like those: "I was made for this moment. There are no problems, just challenges seeking to be met. The solution is out there, I need to just find it." At the end of the day we new investors have many things staring us down, what we dont realize is our situation is not new or unique. There are over 300 podcasts on BP and countless forum posts the answer is out there, GO FIND IT! 

Those are my experiences with my first flip (Your milage may vary)! 

We currently have our second one under contract! 

I wish to thank BP specifically for providing me access to all the info that made my 1st flip easier and made me a better husband,father and RE investor. I will to pay it forward in any way I can. 

"Those who move confidently in the direction of their dreams, will be met with success - Henry David Thoreau