2nd Flip - SO MUCH EASIER THAN THE FIRST!

[Ryan Taft]

Investment Info:

Single-family residence buy & hold investment in Whitmore Lake.

Purchase price: $91,000
Cash invested: $28,000

2nd flip! So much better of an experience than my first flip. Really happy with how the place turned out. Feels good to fix up a place, improve the community, and offer a home people can be excited about. Most satisfying, this place was a SLUMLORD rental. There should not have even been someone living in this place, it was so gross. I'm glad I had the opportunity to get rid of that terrible situation and do my part to give us "landlords" a good name!

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

5 min from my house, SMALL property (control the rehab costs). 1 mile off highway, 15 min to major cities South (Ann Arbor) or North (Brighton). Bones were good - electrical and plumbing had been replaced 20-30 years ago, Breakers installed, PVC and pex plumbing. The house was structurally good to go, just SMELLED and was UGLY. Perfect rehab potential for me!

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

-Moved Fast
-Offered high

Realtor told me about it 4hrs after it hit market. Drove down there at 10 O'clock at night on Thursday and looked at it in the dark. Walked through (and inspected, myself) on Saturday. Offered 2k over asking, with no inspection, on Sunday. Way overpaid, but right now if you want to buy something off the MLS, that's what you have to do. Multiple offers on within days, highest and best was called for Monday. Monday afternoon we got the email saying we got the deal!

How did you finance this deal?

Finance:
Used traditional 20% down 30 year mortgage, paid 5k rehab material cost with credit cards. Did all the work myself, no labor cost. Plan is to HELOC the money back.

How did you add value to the deal?

Fixed smell issue, gutted and made place pretty again. Added lots of light. See description for more detail.

What was the outcome?

Numbers:
91k purchase, ~23k to close, 5k rehab, (prob 2k more in spring to paint the exterior).
Monthly cost $650, expected rent $1500.
New appraisal not completed yet, expecting $140-150k value. If it appraises right I'll reduce cashflow with the second payment, but get all my cash back!

Lessons learned? Challenges?

Learned I suck at mudding LOL. Biggest revelation, or affirmation I should say, is how much easier this whole thing gets with practice. This whole project went 100000000x faster, cheaper, easier, almost zero stress -vs- my first flip from a year ago (NIGHTMARE!!).

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

Realtor - Marilyn Handloser (Whitmore Lake, MI)