$22k First Flip....close to close in 50 days

[Steven Perry]

I am a newbie to the REI world. I closed purchase on my first flip property January 16th. We purchased it with a 6 month signature loan from a local bank with a .5% fee and 6% interest only. ARV Estimated at $215k - $15k (closing costs) - $3k (holding costs) - $7k (repairs carpet paint etc) - $163k loan = $27k in profit. We are under contract right now for $213k and our repair costs were $10k. We had some unanticipated plumbing issues and ended up replacing all of the appliances in the kitchen with new stainless steel. The buyer wants a quick close so the close date is set at March 6th which means we should turn nearly a $22k profit in 50 days!!!

We had ended up listing the price at $219k because of the upgraded appliances as well as some custom backsplash tile work.  There were 5 other identical units for sale in this townhome neighborhood all listed at $210-215k so we wanted to stand out with the upgrades.  The buyer wanted $6k of but had conventional financing and could close in 30 days.  I would have obviously rathered getting a stronger offer but between not being able to sell to an fha buyer (anti flipping rules) and the lightning quick turnaround time I couldn't turn it down for my first flip. 

I certainly learned a lot.  Especially buying a foreclosed property in Alaska in January that had been frozen up for several months, and the plumbing and heating roadblocks that come along with that.  It has been a great experience so far and I am excited to get that check once we close out in a month!