This Flip went so cold it made us go "BRRRR", and for that we are thankful! This started as a nice-and-tidy flip. We purchased the home, which was up disgusting, for $63,500. After vetting contractors we hired the top pick and away we went, creating a home with an ARV of $200,000.

A couple of months in things were going frustratingly slowly, but progress was happening. As it drug on Mr Contractor would be silent for a few days, then I would stand on his head, work would happen in a spurt for a few days after said standing-on-head, then rinse and repeat. In my naivety I pushed the urge to fire the sack of shade until he "got the systems all wrapped up", because on the residential real estate side of things I had dealt with a few exceedingly complicated sales that were caused by open permits (permits that had never been finaled out and closed) so I was very apprehensive about firing the contractor before the Electrical, Mechanical, Structural, and Plumbing permits had been closed.

Six MORE months later it had been enough. "Damn the consequences, this has got to stop." So after a "4 month" project had ballooned into a 9 month project and was nowhere near finished, Mr. Contractor #1 was sacked and Mr. QB was hired. Mr. QB moved smooth and fast and got it done. It wasn't perfect, but it was shiny and well-done. Problems and shadiness were corrected (like plumbing lines being buried in the ground and not connected to anything, HVAC ducting being hogwashed, and so much more) and we were off to the races. The put the home on the market and it was received with stellar results. 7+ offers in the first 48 hours and an above price contract. Boom shaka-laka.

But wait for it . . ..

Mr. Contractor #1 (a.k.a. the Smiling Snake) did a thing. He filed a mechanics lien against the property for the $19,000 "he was owed" for the work he did before getting sacked. "Hmmm . . . . alrighty, we'll deal with that I guess," I though.

Smiling Snake hired a debt collector.

Debt Collector calls the city to report that the work was unpermitted.

City shows up and flips their s*** on us. We learn that Smiling Snake did not pull the permits that he billed us $7,500 for!

So, off we go with Mr. QB's guidance, marching through the process of getting each and every permit for the work . . . after the fact.

Well in excess of $10k later (holding costs and righting wrongs of Smiling Snake that the city inspectors found), we had gained all permits and the Certificate of Occupancy.

Two days before closing the buyers agent decided that they should have the foundation inspected (hmm . . . isn't this what the inspection period is for?) and they didn't like the look of the stem wall, so they breached the contract and didn't close.

In the final analysis we decided that we are comfortable holding the house and offering it on rent. So we extended our construction loan, put it up for rent, vetted the prospective tenants, selected one, and now are working on refinancing this Blue Beauty to hold on 30-year financing. So, thanks to an extremely shady contractor we were able to learn more than we ever though possible about the rehab process. We ended up with an investment that cashflows around $200/month after PITI and is on a two year lease, so we're grateful that we got to learn through the process and not be ruined.

We've got an ongoing court battle against Smiling Snake and I hope that our court system will communicate to the Oklahoma City that fraudulent business practices will not be tolerated. We need less snakes, regardless of if they smile and seem like great people.

Thankful to have been forced to embrace the BRRRR path on this one!

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

For our first flip we wanted to buy something we knew we could add value to, and which had lots of cushion in case our stupidity and green-ness cost us dearly. It did, so we're glad to have had the cushion.

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

We found this on the MLS and negotiated it agent to agent (I am an agent and the seller was an agent, so that was nice, haha)

How did you finance this deal?

We used a construction loan for the purchase and rehab (85% of purchase price and 100% of rehab up to 75% LTV or 85% of total project cost, whichever is lower).

How did you add value to the deal?

Total rehab. . . everything. Foundation, plumbing, electric, HVAC, reconfiguring the floor plan, etc.

What was the outcome?

A top quality home in a highly desire-able area of town! We intended to sell, but ended up holding as a rental for the next chapter.

Lessons learned? Challenges?

Vet your people well, fire fast, and know your numbers. You can't build in too much "Just In Case costs" (except you'll eventually price yourself out of relevancy on your offers). Too many other things to mention here.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Absolutely! First United Bank's construction loan process (and double-closing setup) is fantastic, and Paul Little Construction was Mr. QB that saved my skin on the job. Since we started a year ago we've done at least 4 flips together and he's been a steady, dependable QB!