I made 60k off my first flip, what's next?

Question

My wife and I did an accidental live-in flip as our first deal. I'd been interested in real estate for some time, and started getting an idea of how to find deals in my area after listening to almost every BP Podcast.

We looked at ~15 properties, and submitted ~5 offers. Each time we were outbid by 10k-20k. I finally found a place (2bd/1ba/950 sq ft) that seemed like a good deal. This home was on a busy street (4 lane, yellow line, etc) but was in a prime location near restaurants, bars, shopping, etc, etc. I knew it would go quick because of the price, and the potential it had. Here's the rough numbers:

List Price - $140k

Purchase Price - $155k

Reno Costs - $25k

We built a wired workshop to double as a storage unit during the reno, also did a full gut in the kitchen. The kitchen got the most attention with an LVL to open to the living room, we also added wood-grain tile, white shaker cabinets, stainless appliances, granite, and a mosaic back splash. We put in a tankless H20 heater and upgraded to a 200amp panel out of necessity. We also converted an attached shed into a laundry room/pantry that was accessible from inside the home.

It was originally listed as a 2/1 but had a den with no closet, so they could not list it as a 3 bedroom. We ended up converting the entryway closet into the "den" closet to create a true 3rd bedroom. We tiled the bathroom floor and did some other cosmetic updates (paint, light fixtures, barn wood feature wall, etc) to finish the project.

My wife got into school and we were forced to move and sell the home. We listed it at 249k and had multiple offers within 48 hrs. The final OTP was 260k, but the appraisal came back at only 250k. The buyer could not come up with the additional 10k, so we settled on 255k. Below is the listing if you're interested in the photos:

Listing

After agent commissions and closing costs we walked away with a little over 60k. We're now in a college town, so a rental property seems like a no-brainer. However, there are opportunities for flips and I'm not sure which route we'll go next.

Kyle D. · Answer

@Nick Graham My wife and I are also looking at the same thing. I'd love to chat some time!@Andy Krzanowsky thank you for the kind words, we DID do most of the work ourselves. I was fortunate enough to have a family friend who was a GC for over 30 years help us through the project - he was invaluable to our success. The only thing we used subs for was the 200amp panel and tankless H20 heater, as these needed permits required by the state. The panel had to be relocated because it was in the wall that we took out, so we just upgraded to 200amp when we were moved it. The previous hot water heater was in the shed that we converted to a laundry/pantry so that had to be relocated as well. We went with a tankless gas heater for space and efficiency - the buyers loved it.We lucked out with the reno costs, as we didn't really run into anything crazy. The most difficult part was living through it - ha! The home was built in 1952, so remodeling with lath and plaster walls was the worst part. I was able to find the whole kitchen set through Habitat for Humanity for $1,350. However, we were not able to use all of the cabinets in our design, so I ended up selling the left-overs on craigslist for $950......yes, $400 for that whole kitchen. All the other finishes were on sale: tile, backsplash, Black Friday sale on appliances, 20% off granite from Home Depot, etc. We were very conservative on spending, but IMO, made the most out of our choices.I'm looking at another flip right now, hoping to get enough to have a "safety net" before investing in a rental property. I'm looking for a multi-family, but would settle on a cash flowing condo if the numbers worked. I appreciate the feedback, y'all.

Dustin Verley · Answer

Awesome job, definitely looks good and very refreshing in the context of a rehab. Congratulations also with the sale.

Joseph M. · Answer

Congrats! The home looked nice and nice staging too . Best of luck on your future projects !

Mike B. · Answer

@Kyle D. great story and place! Since you're in a college town now, high rental market, you may want to look into purchasing a SFH to rent out to students. They can be a little more hassle to deal with (imagine 5-6 people in one home), however you only have 1 roof, 1 kitchen (and 1-2 bathrooms) to maintain. NET-ROI can be double digits if done correctly, depending on location, finishes, etc. I have a friend who only does student rentals and he loves it. He admits he gets more silly phone calls then he likes, but he now has systems in place to mitigate this (and also designates a "captain" for the home.. the only person who will be in charge of everything and contact the landlord vs. each individual person). Best of luck!

Nick Graham · Answer

Great looking work on the renovation Kyle. My wife and I are looking to do a buy and hold in the Greenville area in the near future. Quite a bit of low priced properties for consideration in the area.

Kyle D. · Answer

Thanks, Erik. I'm still weighing my options here and am actively looking for other investors in the area for advice. Also, any realtor that is investor savvy would be helpful, as the one I used to purchase our new home focuses on retail sales. Anyone in or around Greenville, NC willing to have a conversation? You can PM or email me, I'd love to chat.

Brian Corbett · Answer

I am a investor friendly realtor that actually doesn't focus on "retail" sales. All of my clients are investors. Shoot me a message and we can discuss your plan.

Nick Graham · Answer

Kyle D. I am all for getting together sometime.

Erik Mogan · Answer

Awesome! I love the tile in the kitchen. I'm excited to see your next flip.