You never forget your first!

[Jessica G.]

Hi everyone! I haven't really posted in about five weeks, and this is why:

http://imgur.com/a/TJ54Z

My first true flip! I made a ton of mistakes and learned from every single one. My "plan" was simply to follow the advice in both of J. Scott's books as closely as I could (I even took them to a copy shop and had the binding cut off and holes punched so I could put them in binders). Next time I think I'll be able to spend less money and less time. Onward!

Let me know if you have questions. There is some commentary in the photo album.

Rough numbers:

Purchase price: $93,000

Rehab: $14,000

Cost of hard money loan & fees: $4,000

Commissions & selling costs: $8,000

ARV: $140,000 to $145,000

[Jessica G.]

Sure @Account Closed Here are some of the biggest issues that I am trying to learn from:

1) I got a written inspection report before purchasing the property, which, duh, of course, right? Well, the inspector flagged a bunch of "issues" that aren't really problems at all in a house built in 1957... but sound scary to average buyers. Now that I am selling, the TREC seller's disclosure form instructs me to attach a copy of this inspection report to provide to buyers. I'm unhappy about that, because I don't want people freaking because the inspector says the house needs an upgraded electric panel. I've had two licensed electricians take a look and they both said it's fine, safe, and compliant with city code due to grandfathering. Same issue with some plumbing and natural gas fixtures. Also, some of what he wrote is inaccurate. He said the automatic opener on one of the garage bay doors is broken. Um, no dude -- there's no opener even installed on that door. Not to mention, about 70 percent of the stuff he flagged in the report is no longer relevant because I've done so much renovation to the house.

2) When you use a hard money loan, you have to pay for the renovations twice -- once up front, then again when you actually have the repairs performed. The lender reimburses you, but only after inspecting the work. I knew this in my head, but in practice it was hard to time projects according to our reimbursements.

3) I didn't have an airtight scope of work, which may have been my biggest error. Next time I will plan and prioritize literally every single thing I need to buy and do. I will have a sheaf of spreadsheets that I will consult every three minutes and I will be proud of my organization. My planning was way too loosey-goosey and I am lucky I didn't land into big trouble either financially or with the rehab. 

4) I undervalued having a contractor manage the project instead of me. I thought I could manage the rehab 100 percent myself and even do some of the simpler projects and save money. Well, without owning all the tools a contractor will have in the back of his truck, I think it was just as expensive doing it myself because of the millions of Home Depot runs I had to make, and how slow I was. And I underestimated how much upper-body strength, patience, and experience you have to have to perform this kind of work, even things I thought were simple, like installing floating flooring and tiling a bathroom floor or backsplash. And being on the job site all day every single day was tiring.