Live in Flip - Any stories/advice?

Question

Hey everyone - I am thinking about trying the "live in flip" strategy out here in Washington (Greater Seattle Area) and was wondering if anyone here has any advice or stories they'd like to share? Here are few questions that come to mind..

What kind of improvements/renovations did you make while you were actually living in the home? Which ones were a PITA to complete/wouldn't recommend? Which renovations do you think contributed the most to the overal market value increase of the house? Which ones did you do yourself vs hiring a contractor?

Thanks!

Jess Haas · Answer

We have done 3 live in flips/house hacks. We did a little bit of everything for each house. The one thing that requires some skill that neither of us could do a good job is drywall. Getting a good smooth wall without putting multiple coats of mud on takes time to develop the skill. Don't search the internet for drywallers though. They charge such crazy prices. If you are flipping to sell I would hire out a lot of the finishes. My first time tiling did not look that great. Paint, LVP flooring, IKEA cabinets, replacing outdated light fixtures will save you money if you do it yourself and they aren't highly technical. Do you have a house already or are you still looking? Is it a total gut job or merely cosmetic? Are you looking to sell post flip or keep it as a rental? If you end up keeping it I would do more work and hire less out because things do not need to be "perfect" for a rental just new and nice. Hope that helps!

Joseph Cornwell · Answer

@Reid R.I have done a couple live in flips, the first one was sort of accidental as it was my first home, but I made improvements as I lived there for 3 years before selling it for a nice profit from my renovations and a rising market from 2011-2014 here in Cincinnati. I am living in another live in flip currently, this one was intentional. As an agent I had researched the comps and the ARV depending on different levels of finish I could do. I also was in a financial position to buy it and full renovate it for 4 months before I had to move in which was really nice, not living in a construction zone the entire time. One major benefit of this model is selling it after 2 years of being your primary residency without paying capital gains, so I would plan on that if you were not already. Which gives you the option to either take it slowly and do a room or project at a time, or if you can swing it, do what I did and rehab it all before moving in. I am closing in on 2 years so I will have the freedom to look for another larger live in flip if I choose or to ride it out for longer. If you have any other specific questions feel free to reach out, best of luck!

Jess Haas · Answer

@Reid R.If you are planning to do a lot of work yourself there are a lot of great options out there for househacking/flipping. I was looking at a house in Beacon hill last week that had a great GRM and a solid cap rate. The market is hot but if you know what to look for and act fast enough the good deals are out there. When we were younger we did a lot of the work ourselves(because we were cheap). I think this has helped us learn way quicker about what is good construction and what isn’t so that when we have a contractor doing the work we know if they aren’t doing it correctly or cutting corners. One example we had a contractor tiling our bathroom and they didn’t use Redguard or Aquaguard behind the shower tiles. Redguard acts as a moisture resistant barrier on top of your cement board. As soon as I saw the contractor start tiling without it I told him he needed to Redguard(I also put it in the SOW). It’s little things like that that I would have never known if I had hired a contractor with our first house and told him I want the bathroom tiled.

Reid R. · Answer

I appreciate the feedback everyone. It was all helpful. @Kevin Scott @Jess Haas We'll definitely live in it for at least 2 years so i'm happy i'll be able to take advantage of the tax break. I'm currently renting right now with my girlfriend. My plan is to sell a property I own in Cincinnati to finance a house hack out here in Seattle. I have not started looking for a house yet but plan to in the next month after I sell another property of this month. It will be my first renovation project so I want to take my time and try and do as much work myself. My hope is that i'll be able to kill two birds with one stone (i.e. stop renting AND also learn how to manage a flip/renovation with the hopes that I could do more flips in the future). Again, this is my first renovation/flip so one of things I am struggling with is determing a realistic plan with the budget I have, the inventory out there, and the market we are in. At this point i'm just trying to find smart people to help chip away at the mountain of questions I have :)

Sherief Elbassuoni · Answer

@Reid R., We try to avoid replumbing and rewiring unless it is really needed. Opening wallks means demo, insulation, drywall, mudding, texture, painting,... tasks which adds a lot to the overall project cost.Flooring, painting, cabinets, light fixtures are all pretty straight forward

Kevin Scott · Answer

I've seen this go mutliple ways. From my own personal perspective I remember growing up my dad had built our house. It went real quick until we got occupancy. (occupancy was granted very early on it too) But once we moved in it took years to complete. He built a lot of houses quickly for others and did some larger construction projects as well but on our own house it went on and on. Great house just a lot of loose ends. That being said we weren't flipping it.I've seen this with others as well where they were flipping and just ended up staying there. Although anecdotal, it seems that way for most the people I know that have tried it. That being said I do have a couple friends that have done it well getting in and out in a few months even with a full time job doing almost all the work themselves. They tend to sub out the drywall taping, roofing and carpet the most. Some other friends do the longer term live ins so they stay 2 years then sell for tax purposes. Seems to work for them.I'd say what you do to fix it up might depend on what is bad, dated or even needed. How long you planning on doing the live in for? 2 years for taxes or quick flips? You own now or renting?