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Updated over 6 years ago, 04/04/2018
2 yrs ago I made 73K on a flip and started my investing career.
Hey everyone.
Thought I would share a cool story (at least to me :) since its the two year anniversary of closing on my first true flip. Hopefully you newer investors will be able to learn something and get inspired to take action. And hopefully you seasoned investors will learn something too. Don't forget the basics!!
So just a super quick backstory.
My family's background is in construction, and since high school that's what I had been doing. Specifically plumbing and electrical. I have always had the dream of flipping houses, but it took us a few years of hard persistent work and sacrificing in order to realize the dream.
My wife and I got married in 2010 at 19 & 20 and we bought our first house a few months prior to the wedding. I will try to go through some of the archives to find a couple original pictures. We bought the house for $12,000. It was basically burnt to a crisp. Through some personal loans, small savings, some owner financing, and using my motorcycle as collateral through a local bank, we were able to purchase the house and start renovations..... Ok I'm getting side tracked. Another post for another day...
While working at a job that I really disliked, I was able to use my super long commute to crank out RE podcasts left and right. I had a bunch of down time at the plant and would read articles books about RE investing. Long story short, I had enough information to write my own book, but hadn't actually DONE ANYTHING!! I had been preparing the foundation financially and with my education, but it was time to jump!!
I can't remember which BP podcast it was, but basically the guy on there said action=results, and MASSIVE ACTION = MASSIVE RESULTS!!!
I decided to take action and do what they said on podcast after podcast. I went driving for dollars on a Saturday with my wife and wrote down a bunch of addresses. And then we found "the one"! This house I had to crawl to the front door under the overgrown bushes to see the notices. We drove right past it at first because it was practically swallowed up! We decided to take massive action again and wrote 1 (one) letter! LOL
OK, OK.... enough back story. L.O.O.N.G. story short, we were (finally) able to get in touch with the owner who lived across the country, negotiate a deal that worked really well for her (Even though we offered her 8K less than other investors were offering for her house, we heard what her REAL needs were and met them), keep the house from getting bulldozed in 30 days (it was about to be condemned and bulldozed), and start our investing careers.
Here are the before pictures, I'll post the numbers at the end!
Oh and if you want to see the whole slideshow, you can find the slideshow here -->
P.S. Don't judge the finishes too hard. It was my first flip, we learned a lot since then!
I think you get the idea. The house was in BAD shape...
We moved the deck, changed the floorpan, moved walls, new floors, bathrooms, kitchen, roof, painting, a bunch of grading work and exterior stuff, new landscaping, exterior trim work, and removed the family of dead raccoons!! Lots of stuff :)
But here are some of the after pictures
Here are the numbers.....
| Purchase Price | $36,000 |
| Sale Price | $202,500 |
| Sale Closing costs | $17,500.16 |
| Title insurance | $100 |
| Purchase gross due at Closing | $36,925.36 |
| Rehab expenses | $74,685.64 |
Total Profit $73,288.84
After that I worked at my JOB for a couple more months. I finally got the gumption to take the "risk" and leave my "good paying job" (For reference, that flip made me about as much as my job did annually. And I barely had the time to do the flip since my job demanded sooooo much time away from home. Yeah, it should've been a no brainer for me lol.)
Since then It has been a lot of work, but man I love what I'm doing. This year we are shooting for 12 flips and 12 wholesales! A lot has change in the past two years!!
So what do you guys think? Are you guys taking massive action??
Have a great day!
@Scott W. My HELOC is a good rate. I can't remember what it was then, but it was a really low introductory rate. I think like 3.75% or maybe even less. So 3.75% x$100,000 =$3750 annually /12 months = $312/month interest only payments. It is somewhere around there. We used some savings, but we maxed out that 100K first.
man you got a lot of equity in your own home!
@Scott W. Absolutely, we are very blessed. "The paid off home mortgage has taken the place of the BMW as the status symbol of choice" -Dave Ramsey.
P.S. I drive a 2000 Civic with 150K miles that I paid about $3500 almost 4 years ago. Will drive it for the foreseeable future ;) My money makes much more money in RE than vehicles.
Ramsey is correct about personal debt but he would have a problem with tapping your equity for investment.
I don't though!
Joseph, talk about hitting it out of the park on your first flip! Nice work! Since that one, have you found people overpaying for potential flips as many do here in the Charlotte area?
@Frank Caputo Yup, people overpay. I just try to get around that by doing off market deals. Seems to be working out pretty good so far.
incredible story @Joseph Druther! House looks great for a 1st time flip!
@Joseph Druther Love to hear about success. I like that you staged the front porch with a wreath and chairs. First impression going down the driveway is "this is home".
Where do you find the houses that you are buying?
@Account Closed, Most of our leads come from driving for dollars still. We do direct mail and online stuff as well, but the best by far are driving for dollar leads.
@Joseph Druther what is the name of the type of hardwood looking laminate you used in this reno? I am about to start a reno in the next few weeks.
@Olu Sanya The flooring was from Lowes and was $1.89 at the time. It since increased to $2.29, but it does already have the pad attached. Here is the item number.... Item # 246517. I would just check out what is available now at your store. I am using a different laminate on a flip here in a week or two and have used other wood flooring products as well. I think it actually used to be by allen and roth, but that is definitely the stuff I used, so maybe they got bought out?
Good luck!
