Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 11 years ago,

User Stats

47
Posts
14
Votes
Thomas Swindell
  • Investor
  • Orlando, FL
14
Votes |
47
Posts

Full disclosure - 1st flip complete!

Thomas Swindell
  • Investor
  • Orlando, FL
Posted

My wife Ashley and I just completed our first flip. I wish I had discovered Bigger Pockets prior to buying this house as there were some mistakes made that we could have avoided after reading the wealth of material on BP. There were a ton of educational items we will take to our next flip as this was a huge learning experience.

Ashley is a local real estate agent here in Central Florida and I work as an underwriter for an insurance company, so neither of us are full time investors…yet. We purchased this house in early July 2013 for $205,000 off of the MLS on a house coming out of probate. We significantly overpaid for this house and that is without a doubt the biggest mistake made in my opinion. We put up half the cash for entire investment and a close friend of ours put up the other half, everything split 50/50.

House was a full gut for the most part. I am attempting to attach a link to the before and after pictures of the house. All the windows were the old Florida crank jalousie windows. All exterior doors replaced. The only AC in the house were wall/window units which is amazing with how hot it gets in Orlando in the summer. It was located on highly desirable Lake Conway on a canal. It The home was a 3/2 and we converted a storage room to add square footage and make it a 4/2. We originally budgeted about $45,000 for the renovation and we blew through that number in no time flat. I’m going to try and figure out a way to attach our spreadsheet which will show all of the costs associated with this project (for those interested). It’s amazing how many small items we didn’t budget for and ended up adding up to big numbers. We used a friend of ours that is a GC for most of the renovation, we did some of the work ourselves, and found some cheap labor for odds and ends around the house that our GC didn’t do. Renovation ended up taking a little over 2 months.

We put the house on the market in September for $345K based on comps. House was on the market less than 48 hours before we accepted a very strong offer at $332K (40% down, $10K in escrow, wanted to close in 3 week period). One major regret I have was not listening to my wife in regards to some important details I overlooked at the end of the project (don’t tell my wife I admitted she was right!). We got to the end of the project and we’d spent so much money and put so much sweat into the house that there were details that we did not take care of such as replacing all of the closet doors, fixing deteriorated carport support poles, replacing bedroom door knobs, among other items. These seemed very minor to me but every one of these items showed up on the inspection report and ended up scaring our buyer away. We learned that buyers looking for renovated houses can be super picky, almost like they think they are buying a brand new house. Going forward we plan on taking care of every detail that can be touched, especially on higher dollar flips.

We put the house back on the market in October. At that point it had been about a month and that initial momentum of a new listing was gone, didn’t have much activity. We went out of town late October to a wedding in the Keys and came back to find out we had a break in and our kitchen appliances were stolen. We will now use alarm systems for all of our flips. We ended up going with Simpli Safe thanks to a recommendation on a Bigger Pockets member. The burglars didn’t make near as much of a mess as the police finger print dust, which didn’t find anything. We took it off the market for a week and half, got it cleaned up and ordered new appliances. Now we’re close to Thanksgiving. Showings really slowed down through the holidays. We did a couple price drops over that time. Come late December we accepted an offer for $319,000 plus a $2,500 concession towards closing costs (house was listed at $329,900 at the time).

We closed this afternoon and made about $20K on the flip. It wasn’t what we originally thought we’d make on the house when we bought it but even if we would have lost money it would have been worth it for the education we took from it. I told my wife today that we basically spent the last 6 months drinking from a fire hose. That’s the only way to learn in my opinion. If that first contract would have gone through, I probably would have continued on renovations skipping out on important details and we would have run into the same problems going forward. I hate to say it but in the long run it was a really good thing that first contract fell through. We experienced some humility and the downs that come with flipping houses and it will only make us stronger.

So for those of you looking to flip your first house, don’t make the same mistakes we made. Buy the house at a good price (less than what you think is a good deal), double your renovation/expense budget, price it slightly below market value to try and get multiple offers. We also decided we’re going to start staging our houses as well for our nicer flips.

Loading replies...