Flip under contract first day of reno

[Brandi Carballo]

So this is a new one. I purchased my grandparent's house form my aunt and uncles when my grandma passed away. Of course I got a really good deal on it. I own other properties that I rent out and I think they just kind of assumed I'd keep it and rent it out.

Original Plan:

Purchase price $86k

ARV $179k

Repair estimates: $25k

Loan/carrying costs $8,000n (hard money loan points and interest, utilities)

Realtor Commissions: $10,750

Potential Profit: $49,250

I live on the other side of the state, so I planned on driving down here and staying in this house while I fixed it up, doing all of the cosmetic work (paint, refinishing floors, refacing cabinets, etc) and bathroom remodel myself and hiring out the heavy work (replacing siding on garage, new rollup door, electrical work, new heat). Initially I was going to stay for 11 days then come back 3 days a week until I was finish, I estimated it would take me 4 to 5 weeks total. Still cheaper than hiring a contractor to do the stuff I was going to do.

My first day here I get internet installed (can't live without that, lol) and the Charter guy strikes up a conversation since I just have an air mattress on the living room floor. I tell him it was my granparents house and I am fixing it up to sell it. He look around and says "I might be interested" and starts asking questions. I tell him all about what I am going to do to the place and my price. So he asks if I would be willing to forgo all the cosmetic stuff and sell it cheaper. I run the numbers and give him a price that would get me the same profit (only way I'll do it) and he agrees to it! Fast forward a couple days and more conversations and his family coming over to check it out and we are under contract.

Actual Numbers:

Sales price $150,000

Purchase price: $86,000

Loan/carrying costs: $5160

Attorney fee for contract: $1500

Actual repairs: $6020

Actual profit: $52,670

Repairs, if you are wondering were:

$1,100 siding for garage installed by me and my husband instead of hiring a contractor, we also skipped the rollup garage door and left the wood doors that swing open

$3,000 new wood stove, installed

$1,500 new electric panel

$100 misc (4x4 post I had to replace and paint for trim with peeling paint, GFCI outlets)

$320 stuff I'd already bought and can't return (ie paint). I'll end up using it on another project, but still including it as a cost for this scenario

I'm really excited about this. I usually only buy projects I am going to hold and rent out. This is my first flip/sale. I doubt this will happen again, but it has me excited for the next deal!