Doing Things the Hard Way: My First Flip

[Kyle Shankin]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $99,000
Cash invested: $15,000
Sale price: $154,000

I successfully flipped a 3Bed, 1Bath bungalow in Troy, MI last year. Aside from my terrible timeline estimation and one unforeseen new driveway installation, everything else went according to plan.

What made you interested in investing in this type of deal?

While my preference would be to invest in rental properties, I liked the idea of a "quick flip". This particular property was in very bad cosmetic shape, had some slanted floors and a small laundry list of items that the city inspector insisted be changed. Despite those items, the location was solid. This house sits on a side street off of a popular main road and has super easy access to the highway and shopping. Plus, new houses were being built on some vacant lots on the street.

How did you find this deal and how did you negotiate it?

I had been working with a real estate agent, looking for a house to flip. She brought it to me.

How did you finance this deal?

I borrowed cash from family to buy the property and pay for the rehabilitation costs.

How did you add value to the deal?

By tearing out all of the existing floors and fixing the slanted slab underneath, repainting the porch, complete kitchen remodel, adding a new driveway, adding new carpeting and new paint throughout the house.

What was the outcome?

Success! The house did not sell for as much money as I had hoped and the project definitely ran longer than I wanted, but we made a profit in the end.

Lessons learned? Challenges?

Working on this house was fun for about two weeks. It doesn't take long for the grind of an 8 hour job, plus 4 hours house rehabilitation to get to you. My biggest lesson learned is to work hard on the deal finding, financing and planning and let someone else do the actual labor.