A flip that almost flopped. Success story but just barely!

[Shannon S.]

Hi everyone! As a Realtor and investor I see many less experienced investors trying to get started- asking questions and wondering what their expectations should be/how to make money flipping a house, and I hope this post is useful.  I believe a big part of success is not only acknowledging failure and falter, but celebrating it as a way to learn, grow, and get better.  As many smart people have said, failure to meet goals is actually the best teacher.  It makes you more knowledgeable, helps you be less fearful, and inspires you to try harder.   

So here's the story, briefly. This flip was not my first project, but was the first that really took a "leap of faith". It was a much larger house, and much bigger renovation project than I had tackled before. Mistake #1: I bought it thinking that I understood ARV's and renovation costs, and found out that was not true. Mistake #2: after a long and arduous renovation, I got greedy (as did my agent) and priced the property too high. Mistake # 3 was not recovering from Mistake #2 quickly enough and not pushing my agent harder to market the home. Did I lose money? No, in the end I made a little. Was the money I made worth the headaches and trial, and time spent, on the project? By my calculations of hours put in vs. actual profit, the answer would be no. Was it a great learning experience? 100% YES. I hope that it is for others as well. Could I have made 3-4 times the amount of money in profit had I not made mistakes? YES. But it is OK. The good news is my next flip was much, much more successful although similar in size, scale and location. :-) So in the end, the profit was my knowledge and experience, vs. $.

Here is an infographic that provides an overview of the timeline and how it relates to the profitability of the project. Timeline Infographic

Here is a link to a detailed before and after micro-site on the house: Fred, the flip that almost flopped.

Here is a link to a simplified Net Profit Calculation:Profit Calculation, Frederick Ave.

Let me know if you have similar stories or questions! Thanks for reading.