Is it worth waking a baby to buy a flip? 1st flip in Cincinnati!

[David Hayes]

I’ve been on BP for a while and learning lots of great info from forums, other posts/people and of course the podcasts. So I figured it’s time to share one of my own stories currently in progress…who knows maybe it will help someone, maybe someone will read it and help me see how I could have done something better, or maybe this will just be good therapy for me and no one else will read it :)

First, very quick background about myself: I work full time as an engineer, most of my REI experiences are lived out in collaboration with my brother Brian and our ventures in Columbus together.

Background on this deal: I had been looking at "deals" from a local wholesaler for quite a while, really wanting to jump in and try to flip a house but as I continued to run the numbers each deal was just so tight in my opinion, that it was pretty risky and I couldn't find one that made sense. Finally one day I saw one come up in Hyde Park (very nice area in Cincinnati – houses like this don't come up almost ever), I don't remember the exact numbers, but purchase price was about $80k, with ARV ~ $220k+, it obviously needed a lot of work, but finally the numbers actually looked good on this one, I thought it would be an "easy" $30-$40k profit – unfortunately it was gone by the next morning when I put my offer in. I was very bummed. Frustrated that I didn't go with my gut and put an offer on the spot when I went out to see the property within hours of it being listed.

Which brings me to the next day, I got a text from the wholesaler at 6pm that a property just came up in the Indian Hill SD, near Kenwood mall – I was even more surprised by this than I was with the Hyde Park house, because houses in this SD really command a premium and I had also never seen one come up in this area. I was heading home from work and got on the computer right away to look at pictures and start putting my rehab budget together to see if this made sense. Here are the numbers they advertised:

Purchase price: $236k

Rehab: $60k

ARV: $370k

House was a 3BR/1.5BA, ~ 1800sqft ranch with full basement – their rehab included converting the half bath in the master to a full, to turn it into a 3/2.

It was hard to argue the ARV, a house 3 doors down just sold a couple weeks before for $370k, and it had 300 less sqft. So I started looking closer at the rehab. I think their estimate was a bit low for rehab cost based on the pictures, but this seemed to have plenty of margin, so I figured it was worth a closer look. It was already 9pm by the time I ran the numbers and felt good about it. I didn't want to lose this one like I did the night before so I called the wholesaler and he could get me in if I could come over right now. My wife was out and my 1.5yr old girl was sleeping…so I had no choice, I had to wake the baby and head over to the house!

After my walk through at the house, there was no major red flags, so we decided to make the leap, and got it under contract that night. Good thing because they had several people the next morning ready to jump on it too.

That’s enough for this post…more to come on how we got financing, what has been happening with the rehab, contractors, water-mitigation, etc.

If you have any questions feel free to jump in at any point.

And lastly, my question for you…would you (or have you) ever woken up your child to go close a deal? 

PS – my daughter was fine with being woken up, didn’t even cry, I put Mickey Mouse on the tablet and she was happy :) The real question of was this worth it or not is yet to be seen...