My first flip (four year live-in)

[Andrew Hahn]

We just completed our first real estate deal, it was a four year live-in flip. Our original plan was to purchase the house, live in it for a while, and turn it into a rental. However, my wife's job relocated us to the Chicago area.

I am a young lawyer.

Bear with me because I'm a new and still learning how to properly value and present the numbers. Here's my attempt:

Location: St. Louis, MO

Purchase price: $50,000 (short sale)

- aunt was agent, so fee was waived (she was helping us out)

- borrowed money from grandma for the down payment: $13,000

Material costs: $8000

I forgot to itemize everything over the course of the four years, but the improvements were:

-blown in insulation

-tile floor in kitchen

-new bathroom flooring x2

-new basement carpet

-new basement flooring (previous was rotted through)

-new carpet in bedroom x2

-hard wood flooring refinished

-new refrigerator

-painted entire interior of the house

-installed two custom closets in bedrooms

-repaired and repainted the garage

-tore out dinning room drop ceiling, installed drywall ceiling

All the work was done by us, save the hardwood floors.

Sale Price: $108,000

less:

-$6000 in fees (man I need to get a real estate license)

-$5000 in concessions

Net: $43,000

$108,000

-$33,000 left on the note

-$13,000 to grandma

-$6000 fees

-$5000 concessions

-$8000 material costs

The problem that I have is how to value this in terms of holding costs. Our mortgage was $410 on the property, whereas we were paying rent of $725 before purchasing this. I tried to comp the rentals in the neighborhood, and if we had not purchases, I am convinced we would not have found a 2/1 for anything less than $600 (most were closer to $900).

Pictures before:

After Pictures

It was a great experience, and I am looking forward to getting into the real estate game here in the greater Chicago area!