Closing on first flip, 2nd flip under contract - Chicago land area Dupage county

[Robert Obniski]

Hello to all!  ....It's lengthy

#Biggerpockets has been an awesome resource for me for the last few months while getting into REI.

When I sign up on a forum (any forum) I get really hyped up on how I am going to be active and contribute and so on. Well I have consistently NOT done that. I'm more of a lurker who chimes in once in awhile. I'm learning the more active i am in this business (Not just BP but the entire real estate realm) the more I get in return...as in return of knowledge, contacts, network, friends, wisdom. 

So to kick things off, of me attempting to be more active...

With Jack n Coke at my side, I am starting a success story thread of my first 2 properties..lets start from the beginning...

January 4, 2015: Currently living in Wisconsin with intentions to flip properties in the Chicago land area. Find a property on the mls (reo) in Westmont, IL (suburb of). I like the deal and think it will be great (lol @ me). Asking $155,000. After a lot of back and forth, offer accepted at $136,000. On the side I get wind of this thing called 'wholesaling' through this site. I met with a wholesaler and agreed on a price for a suburban home of his located in Aurora, IL.

January 21, 2015-Back to the land of my birth! Chicago!! (I really love this city if you couldnt tell)  I move in with my sister who has a vacant room in her condo in Lombard, IL. 

At this point I have the Westmont condo under contract as well as the Aurora home under contract. I will keep the Aurora story short. I was hyped up looking at the number presented to my by the wholesaler. Once I got a few contractors in there i saw the SOW was 2x the wholesaler estimation.  Backed out, that deal was dead.

I started looking for another property and again through the MLS my agent found a townhouse (reo) in Glendale Heights that seemed promising. Well after the offer was accepted the closing process was seamless! Went very smooth. I was able to find, offer, close on this one before the westmont condo even had a solid closing date.

Townhouse-

2 Bed 2.5 Bath 1200sq ft
Asking 99.9k
Accepted 100.5k

walkthrough: https://www.youtube.com/watch?v=mgTS2F0p3KU

This checked off everything I was looking for in my first flip. Easy, simple, mostly cosmetic. I'm pretty handy myself so this one looked like one I could pretty much take on my self. I know down the road I wont be doing it my self but sometimes I like learning the hard way, I think it gives you wisdom in that particular field to have gone through it. 

After about 4 weeks of grinding I was ready to list the property. The only work I contracted out was the flooring. The tiles in the bathroom and the flooring on the 1st level was done by a single person in about a week. Good guy, I like him. 

So at this point I bought it for 100,500. Invested around 15,000 into it. (Not all 15k was into it, a good amount was for first time purchase of tools like wrenches, saws, power tools ect)

All in: $115,500
Listing price $159,900
Accepted: $149,000 with the terms of offering a home warranty and changing out the fogged glass in the sliding door. -$1,500

So $147,500-$115,500=$32,000- all other expenses/commissions/holding = I will be making around $19,000 more or less on this one. Which I am very proud of..being my first flip. Closing was set for this Friday but moved to Wednesday. Either way Im getting paid. Here are the listing photos..

So that was listed early April 2015 and was under contract in the last week of April.

Sure enough the Westmont Condo finally closed as soon as that one was listed so it was really a 1-2 punch. The condo from what I learned was vacant since 2011 and was occupied by a heavy heavy heavy heavy smoker. Like no joke, walls, ceiling, tile ground, cabinets, everything was smoke stained yellow. But whatever, gotta do what ya gotta do.

The financing for the condo was through a private lender who agreed to the terms of they pay for everything and when I sell they get the principal plus 50% of the profits. 

Accepted price was 136k but assesments and fees and all that came to $140,000

It was a quick cosmetic flip like the townhouse and this one even needed less! Only $10,000 invested. So im all in for $150,000

2Bed 2Bath 1400Sqft (I think?)

Before:

AFTER (Listing photos)

All in: $150,000

I accepted an offer of $182,000

After fees/commission/etc I will be left with $16,000 ish which is then divided in half so I'm making around $8,000 on this one. Closing is set for July 20th.

As long as I don't lose money I dont count it as an actual loss but when it's only $8k I take it as a personal loss because I know my tie and energy could have been used better to make maybe double that. But seeing as its my 2nd flip im not going to be too hard on myself. 

Ive learned so much from these first 2 I cant even begin to start with any kind of knowledge to share as its so much. 

But yeah there ya have it. My first 2 flips! Successful to me so im happy. 

But as of right now Im looking for my next 2 properties (trying to juggle 2 at a time) 

so let me plug this quick...

LOOKING FOR PROPERTIES IN WEST CHICAGO SUBURBS / DUPAGE COUNTY

CASH BUYER!!!!!  Someone please lead me to my next properties!!!

-Also I want to thank anyone who took the time to read through this or just skim through it! I will try to respond to any replies as quick and thoroughly as possible! 

Thanks!!

[Robert Obniski]

Originally posted by @Non Phan:

Those are amazing rehab cost numbers! I have been hesitate to enter the rehabbing side of real estate investing since I don't quite know where to begin calculating rehab cost. Perhaps you can write more about your process in a blog post since it's so fresh on your mind? 

Congrats on your success!

 Thank you!

To elaborate on my rehabs..

You should definitely take into account that both of my flips were not sfr. Meaning, almost zero work to the outside had to be done as the association usually takes care of that in regards to townhouses and condos. Also, both these flipse were all cosmetic. Biggest thing was flooring, which I contracted out. Other than that its just things like toiets, light fixtures, doors, painting. Pretty easy to be honest. The type of flips I did, to me, are more like a hobby type of flipper. No gut or extreme work, just simple work. A lot if it though. 

As far as calculating rehab costs..  Just go to your next property with pad and paper go down the list..

Flooring? Find out how much sq ft, find out what kind you would like, do the math, add a little extra then add labor.

Paint- Calculate area. I dont know the forumla but ceiling height and square feet or something i dont know.. But i never stress the paint because I know if i dont buy enough, i can always go buy more. If i buy too much I will just use it in the next property. 

Light fixtures/Fans - Count how many of each and give your self a high number per fixtur

Bathrooms-New toilet necessary? New Faucet? New shower head? Etc Go to home depot, pick out what you would use, keep it in a journal or take a pic with price there and then just figure it.

Kitchen- Keeping cabinets? Painting cabinets? New cabinets? All the knobs and pullers. Faucet. Appliances? You can get a decent 4 peice stainless package for around $2200

Random things- Outlets, GFCI outlets, covers, etc just tally how many then go to the store. (Things like this I buy in bulk as I know they will be needed down the road.

At the end of the day its best/easiest to just take a saturday or sunday you have off. Go look at a potential property or a 'like' property of what youre looking to get into. Spend an hour or more and tally up everything and measure everything then spend the next couple of hours at home depot/lowes/menards and act as if you were actually going to buy that. 

It gets easier the more you do it but I think that would be great practice.