First Flip Underway

[Nnabuenyi Anigbogu]

Just closed on my first Flip property yesterday afternoon and quite excited to get going. Previously i have only dealt with buy and holds. I decided to go the @Brandon Turner route and partner with an expert flipper for my first one. I have spent the last 4-5 months getting to know a guy who flips within a 4 square mile radius of Chicago (has done over 100 in the last few years) and has gotten to the point where he set his own comps at times. We are operating a 50/50 JV where i deal with all the financing, legal, accounting, insurance etc and he deals with the permits, construction, contractors, architects and so on.

Deal Stats

I am using a HML which of course reduces the profits (i could make 20-30k more with cheaper money). But spending 45K (over 6 months) to make 60K (30K when profit is split) is still great for me and builds up my portfolio and experience.

The rehab cost is conservative because my partner has been able to complete other houses with 125K-130K so we padded 10K just in case. Also it is always a total gut rehab down to the studs (even studs get replaced so its almost impossible to be surprised by any extra repairs (only surprises would be tied to outside factors like theft and fire etc...). All the other costs (except cost to sell) are exact because i paid them all yesterday. Insurance is prepaid for a year so its part of closing costs.

I will put up some before pics later. As of now the architect has been there and has started drawing up the plans and layout. 

I look forward to calling myself a flipper.

For all the newbies (im still one myself) you just have to jump in and do it. I decided to jump in this past February and i now own 5 buy/hold units, am a small investor in one flip, and now closed on my own flip with a partner. All while working full time (switched to a new job 2 months ago). I'm still very small potatoes and sometimes i feel like i haven't done anything but at least I have started down the path i want to go.

[Nnabuenyi Anigbogu]

Property Info.

Currently a 3bd/2bath. Finished product will be 5 or 6bd /4bth total. We are essentially adding on a second floor (pop top) and there is enough footprint there for 3-4 bds with one of the beds being a master suite with its own bathroom. Basement will contain the other 2 bedrooms and 1 bath. First floor will be completely open with Living, dining, Family room and kitchen with two separate french door entrances to porch. Premium wainscoting all around the first floor.

Exterior - Top coming off

Dining room with mold

More mold

Old Kitchen

Bathroom