We just net $63k on a live in flip& got 2nd rental under contract

[Caleb Friberg]

Hey all,

My wife and I just closed on our first live in flip (first flip for that matter) on Monday and walked away with over $63k! Then yesterday I opened up escrow for our 2nd rental property. Things are finally picking up some steam.

We bought the live in flip over 2 years ago for $200k. The woman that owned it had passed away and her caretaker faked her signature saying that he was willed all of her belongings including the house! He got into drugs, had people living in the basement and ended up selling all of her belongings and stripping and scrapping 80% of the electrical out of the house to feed his addiction. Well, he was finally kicked out and electrical was redone by the woman's father, so we got it for a smoking deal. It's 4bd/4bth 3,800sq ft on almost 6 acres in a very sought after area of my town. We got a HELOC on the house and used it to build a garage, fix up the kitchen, new paint and fixtures throughout the house, landscaping and I acid stained the basement floors to give it a one off look.

One suggestion I would give to anyone looking at doing this is know exactly what your ARV is (and keep it on the low side), know your costs going in and adding 30% to that for safety margin and DON'T overlook how much monthly holding costs are because they will eat you alive if you're not careful!

The rental house we got under contract was from me doing extensive networking. I met with a local property management company owner a few weeks ago that is trying to liquidate some of his inventory. I liked the property but the price was a little too much for the repairs that needed done. I just got a call from him yesterday saying that if I was serious, they just dropped the price $15k. I met him 2 hours later and signed a P&S agreement and opened up escrow. Total price $70k, will need about $18k - 20k for fix up and it's ARV will be around $120k. I plan on buying it, then BRRRR out most my $ so I can go out and do it again.

Last suggestion/opinion: "Your net worth is only as big as your network". I'm not sure who came up with that saying but when I sit back and think about all the super successful people I know, this holds very true. The second thing they have in common is that they know there is no substitute for hard work, there is no such thing as get rich quick. I'm just a normal guy, I'm not super intelligent, I didn't come from a wealthy background or have a leg up in this world. I just set some high goals and I push myself harder than I did the day before and learn from my never ending mistakes. Lastly, I wouldn't have really got this far without everyone from BiggerPockets, thank you for all the interesting and inspiring articles and posts, I hope that my contribution might inspire someone else to take the next step. ~ Caleb