SFR Rehab #2 finished.. analysis

[Danny Day]

ARV $125,000
Purchase $70,000
Rehab $23,000

Estimated time frame: 2 weeks
Rehab time frame: 4 weeks
Budget: $18,000

Analysis: Went 2 weeks over the estimated rehab time frame because I decided to to some of the work myself (make ready, landscape). This ended up delaying the project for an extra two weeks while we worked at night after my 9-5. Not sure if this was the best play. At most I think we saved $1,500.. Ended up listing with a flat fee broker (1st time to try this) for $250 for the lifetime of the listing.

Upgrades:
-New roof
-New carpet
-New tile
-New paint (interior / exterior)
-New light fixtures
-New ceiling fans
-Master bath remodel
-Granite counter tops (whole house)

Lessons learned: Always change the locks on your rehab, on day #1. We had the previous owner come by the house, break in, and steal the shed in the back yard. Luckily we had their contact info and we told them we wanted the shed back or $200. We got paid for it, but it was an eye opening experience (that people would do something like that). Also had a hard time closing the deal up front with a HML we had never used before. After 26 days of not being able to fund the deal, switched lenders right before seller wanted to back out and closed it out in 3 days. We went over budget by about $5,000.. we made up for the loss on the flat fee listing end saving around $3,500 on selling cost.

Putting the sign in the front yard today, photographer comes by tomrorow. Should be on the MLS by Wedseday.

Here's to a quick sale!

[J Scott]

Originally posted by Brian Hoyt:

Originally posted by Joel Owens:

If I was looking at J Scott's 123flip they have made a little over 500k in 4 years on about 28 properties.That is roughly 125k year and 7 flips annually.

That comes out to about $17,857 per property which is right in the range that Danny is dealing with here - for which Danny is looking to improve upon. Looks like if Danny applied himself full time at this and could maintain as good of a deal as this one he has here on average he would be right at J Scott's level, based on your numbers. If he can build up enough reserve to finance 100% of his deals himself, he'll be even better off. Pretty cool.

Just to verify my numbers (and my thoughts)...

If you include the three properties I should be selling in the next couple weeks, I will have made about $676K on my first 32 properties, or about $21K each. In my resale price range, I know several rehabbers who are averaging less than this and I know several rehabbers who are averaging more than this...so that's probably a reasonable average for the level of flip I'm doing.

Average hold time for these 32 properties (not including the two that I had as rentals for a long time) was just under 100 days, which means I earned an average of about $6300 per month -- not too much more than Danny.

Looking back, I had pretty much no idea what I was doing on my first few projects and while I learned a tremendous amount, I'm sure there was plenty of luck involved. Anyone who turn a consistent profit on their first few flips is WAY ahead of the game -- not only are they building a successful foundation for long-term investing, but they're making money doing it.

While I would disagree with his decision to do any of the work on the project himself to save money, and while I'm not a fan of flat-fee listings, it sounds like Danny had a good grasp of the numbers on this one, and if it sells where he thinks it will, he'll have a very decent payday.

That's more than I can say about my first flip, which earned about $3000 over 3 years of holding (it was an unintended rental for quite a while)...