First Flip Done-ish and lessons learned

[Jason Rivera]

So I finally finished my first flip and overall, it was a pretty good experience. To start, we got the perfect deal. Our expected ARV was $250k at the time. The house has been on the market for 2 weeks and is currently listed for 245k and we're throwing in a 1 year home warranty. Repair costs were ~68k and the purchase price was 99k so the numbers were dead on assuming it sells soon.

Now, for the parts that I messed up.  To start, I didn't get a contract w/ my contractor.  He's someone that works a lot w/ my family so it was a very low risk and went just fine, but I admit, I shouldn't have done it that way.  

My partner (Dad) is also not very organized so I had to watch the money like a hawk.  There were items that I didn't find out about until the very end but we kept it near budget.  

My contractor took some creative liberties and scheduled certain tasks at inappropriate times which added unnecessary costs like extra paint (almost double the necessary paint).  

I was hardcore about the budget and the 70% rule which I probably didn't have to be.  I think if I wasn't partnering, I would've been more relaxed about it.

Plans moving forward:

My goal is to do 6 flips (1 almost down, 5 to go) then switch over to rentals. I'm planning to start an LLP. I need to create a standard contract for contractors. I need to get more organized w/ my bookkeeping and I'm evaluating quickbooks now and probably others soon. For this first one, I went through the tedious task of entering each item from every receipt into a spreadsheet to categorize the items and identify how much we spent in each category. You don't realize how many items go into a rehab when you watch it on TV. :)

I relied on the contractor to estimate how long the project would take but I will create a schedule for the next one.  He didn't meet his timeline, but I never expected him to anyway so it wasn't a big surprise when he went over.  On the plus side, it was a fixed bid.  

I'm currently evaluating the 2nd potential property and will probably make an official offer this week.  Its a larger house in the same neighborhood and I'm planning on a bigger budget to cover higher end materials and appliances.  I also need to look into 1031 exchanges since in this particular case, I could have the property identified and ready to go.

Well, that's it.  Overall, I'm happy with the finished product.  I treated the house as if I was moving into it and I hope that the lucky buyer enjoys it.  On to the next one.

[Jason Rivera]

My pleasure @Brenda B.. I forgot that I got the tiles from floor and decor and the laminate from lumber liquidators. I also made sure to buy the major items around holidays for the extra discounts. Right now, many stores have 40% memorial day sales.