I Flipped my First House, Now What?

Question

Hello all,

Over the past 6 months I was able to flip a small condo in Western Massachusetts. I have always been interested in flipping houses in fact that was my dream job and accomplishment! This deal nearly landed on my lap since my parents lived next door to an older lady that passed. The family of the older lady lived in Florida and didn't want anything to do with the Condo except to sell it. We knew all of this because of a simple conversation with the realtor that was going to be listing it. The condo was an absolute disaster inside, nothing was updated or changed since the date it was built in 1960's. Having said that, it was a condo, fairly straightforward, not much to worry about structurally or on the exterior. I did a decent amount of the work on my own, only on the weekends as I live in the Boston area and work full time & go to school! I bought the condo for $96,000 and sold it for $182,000. I put about $30,000 of renovations into it using my income and credit cards. So I know I did very well but now I am dying to do it again. The problem is that the deal was very unique and lucky so how do I repeat this? Can I repeat this? I now have more cash than I did previously so I would like to put it to use again.

Another roadblock is I live in one of the most expensive towns in Mass. It is nearly impossible to find something local to flip because I can't afford it. I would like try to find something closer to where I am geographically because weekends traveling across the state was daunting.

Side note - I work in project management for a large commercial general contractor, so I am very savvy with managing construction activities and projects so if anything I would love use that to my advantage.

Does anyone have any recommendations? I want to invest the money in another flip or rental or both. Also, if anyone is local to the Greater Boston area and would like to chat I would love that. Please feel free to reach out.

Thank you!

-DJ

Jonathan Bombaci · Answer

Congratulations Daniel, that’s a great first flip! While that deal did fall in your lap a $50,000 - $60,000 return is not unheard of especially if you did most of that renovation yourself or at a discount due to the skills you bring to the table. You could definitely repeat this. I’d recommend starting by telling everyone you know what you’re looking for. Post to social media and tell people what you want. Also connect with as many wholesalers, investors, and real estate agents as you can. Be specific on what you want.

We see deals all the time, they even exist on MLS, but you need to narrow down what you want and where you want it. Are you looking for another condo or something else. Is the budget $150,000, more or less.

Condos are great flips but the issue is ARV is very easy to calculate since you have great comps in the same complex. This minimize the risk to the investor on resale but will work against you on the purchase.

Congrats again on the successful first flip. Let us know what you're looking for where. 70% LTV witching 45 mins of Boston is too broad, Niche down and that's how you'll find your next project.

best,

Jon

Dmitriy Fomichenko · Answer

congrats Daniel!

Ofer Eyal · Answer

Well done @Daniel Black! Sure you can do it again, man.

If your area is too expensive and you want to do it in your area read Brandon Tucker's "How to Invest in Real Estate with Low (and No) Money Down" - it has great tips for when you budget's too low.

However, if you want to use your money now and are open to investing elsewhere, get David Greene's "Long Distance Real Estate Investing".

Either way, as you move forward, I'd seriously suggest you get educated and come up with a strategy before you make mistakes.

You have so much working for you - a great first experience, intimate knowledge of construction projects, connection to contractors, good hands, passion, being hardworking, dedication. But all of these are not a strategy. Just great building blocks.

The good thing with both books mentioned above is that they'll help you build a strategy.

Best of luck and God's speed on your way to build your dream career!

Rick Pozos · Answer

@Daniel Black keep doing what works. Ask your parents to get to know everyone in their condo complex and make friends with them. Have them tell everyone that their son is the one who fixed up that unit that looks so good. If nothing else, you might get some contractor projects out of it. It was hard driving across the state?? So is making an extra 30% or 40% on your income in only 6 months. THAT is no unicorn, that is how you do it. Hard work and networking.

Start having your friends ask their friends and relatives if they know someone who needs to get out of their property also. It takes time, but you will start to find more unicorns all over the place. I guarantee!!

Chad Shultz · Answer

Nice work Daniel.  I hope you really put in a good effort on your flip, so you can start off building your personal "brand" as well as making money on a "flip".  Believe it or not, your reputation will soon follow you, especially if it is not a good reputation.  I like to be fully involved in my projects, so as not to allow shoddy work, which could eventually make me look bad.  Contractors will come and go.  To answer your question, about finding "unicorns" (as Gary mentioned) you should look into getting involved, or joining, your local Investors Association.  There are many, I am sure.  In your local association, you will easily connect with wholesalers, realtors, other investors, etc.  All of these are ways to keep your finger on the pulse of real estate in your area.  You might even find someone who wants to co-venture with you.  I currently have more than a dozen different avenues for finding deals where I live locally.  I am not personally trying to do a large amount of projects at once, but over the last three plus years, I have not run out of projects.  They always seem to come along when I am ready for the next one.  Of course, I am always looking for the next deal, but this will help you prevent yourself from making a poor choice and buying the wrong deal, just because you "must" have one to do.

Gary Mazzarella · Answer

Well done Daniel, I think you just described the unicorn we've all been hunting for. I live in Arizona and New Jersey so I also know the problem of finding these kinds of deals in hot markets. Most fixers here in NJ are so high priced to begin with and multiple offers on top, that you can't make the numbers work. But keep looking and networking and asking anyone you meet if they know someone wanting to sell, because one conversation is all it takes sometimes.  Also hook up with local wholesalers but make sure to crunch the numbers closely when they present a home for sale.

I Flipped my First House, Now What?

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