My First Flip/ Multi Acquisition Completed

[Andrew Michael]

Hey BP,

Its been a while but I assure you I have been working hard out here.  Anyway I wanted to say thank you to everyone in the BP community for the encouragement, expertise, and guidance along the way.  Here is a brief update and recap.

The first thing I did was find a local investor friendly agent who has been a tremendous help.  I cannot tell you how valuable my time with her has been.  I estimate we visited or looked into 50-60 properties before I finally found one that fit our criteria.  Though all of these visits seemed to be a waste of time, I quickly realized how much I was learning and this allowed me to fine tune my criteria and better identify potential investments.  Thus far, I have developed a hand full of strategies but both my flip and my multi unit came as a result of driving for dollars.  Here are two more strategies I have received tons of calls from 1) Put your business card in every real estate related book at book stores, home depot, lowes etc.  2) Tell every postman or postwoman, UPS Driver, Fed-Ex Driver what you do and give them your business card.  They have a mental roll-a-dex of vacant properties and will probably rattle off a few on the spot.  Moving on.    

The Flip was a mid-level rehab for a SFH in a very desirable location. We finished the basement (adding more livable space and adding another full bath), added a deck, upgraded the kitchen, upgraded main bathroom, knocked down a few walls to open up the kitchen\ living room combo, added new light fixtures, knobs, switches, new paint, and I took care of the landscaping.

Flip Deal Structure:  Since I had no house flipping experience here is what I offered and brought to the table to my partner (that same agent).  I found the deal and negotiated our purchase price with the absentee owner, offered to split profits 50/50 if they financed both the purchase and rehab costs, I offered to do all manual labor (landscaping, minor hauling of existing furniture, shoveling snow, DIY repairs, cleaning house before showings, etc).  They accepted.  And we were off!

Meanwhile, I continued to look for my next acquisition.  I found a turn-key duplex that was vacant and up for sale.  The previous owner was an elderly man selling off his portfolio and you could tell he took great pride in his properties.  This duplex was by far the nicest one I have been in thus far.  After several rounds of back and forth, we agreed on a price and signed the contract.  

Same Day Double Closing:  I WOULD NOT recommend this strategy to a new investor.  It was perhaps the most stressful week of my life, none the less I just said "lets do it baby I will get it done" (Grant Cardone Voice).  So my first closing of the day was the flip in which I used to proceeds of that deal to then be wired to the title company of my second closing to fund the purchase of the duplex.  There was a lot of timing issues involved and lots of praying that the wires would go through etc.  All in all it did work out but like I said, probably not the best idea for a beginner.

Quick numbers:

Flip:

Purchase - 230k

Rehab - 37k

Sold - 356k

Duplex:

Purchase - 145k

Combined Rent - 1,875

I don't know if either of these are "home runs" but I think they are pretty solid deals.  The experience gained was immeasurable and a huge boost of confidence.  I can say without question I have never worked this hard.  I spent countless hours working before and after my 9-5 job, devoted weekends to driving for dollars, spent hours and hours on real estate education but every second has been worth it.  

Anyway my hope is that this will encourage others to keep on working even when your not quite sure what your doing.  Just commit to the process, work hard, and it has a funny way of all working out.  

Thanks again to all, this was surely a BP team effort!

- Andrew