Lessons Learned: First Flip Experience

I have considered myself pretty handy and have enjoyed looking for real estate deals for a large part of my life. Having been a football coach traveling around the Midwest and not having much available time it was very hard for me to pull the trigger on an investment property or flip. (I had not heard of Biggerpockets yet and had I, I probably would have looked to househack much earlier). Football coaches do not get paid much and move jobs a lot so there would have been a good amount of coaches looking for housing and I think I would have had no issues filling my property. If you work at a college or in college athletics I HIGHLY recommend looking at househacking. You will have a steady stream of people looking for housing!

Anyway, back to the task at hand. In spring of 2019 we new someone who was looking to sell their house cheap. It had foundation issues, all bathrooms and kitchen needed gutted, and garage needed torn down. However, the neighborhood was great. Had over 2000 sq feet of finished space, 3 bedrooms, 2 bathrooms, was on a good size lot, and the windows and roof were newer. 

I partnered on this deal with my mom. We both put 25k in to purchase the house and used a HELOC on her residence to pay for the rehab. I was coaching at the time so I could not be there day to day but my mother worked as the manager of the property. My dad and grandpa tore down the old garage, and my mom hired a family friend who has a construction company to do the foundation, build a garage, and redue the kitchen and bathrooms. They hired their own subcontractors for electric, cement work, and plumbing.

My mom painted all the rooms and refinished the wood floor, and powerwashed the deck as well as other odds and ends that needed done. 

We ended up spending about 100k including the purchase of the home and sold it in February of 2020 for 143k. My mom's proceeds of this purchase ended up being the downpayment for a rental home in Waterloo. My proceeds ended up being a downpayment for my first duplex. 

Lessons Learned:

Be prepared for worst case scenario and have great problem solving skills. For example, we prepared for a big foundation repair but when we fixed the driveway it solved our foundation issue for a fraction of what we planned. Being able to adjust on the fly helped us find great solutions and save money. 

We prepared to work. I know hiring everything out seems like a great idea but you could see your profit melt away quickly on things that anyone can do on their own like changing outlets or painting. If you have great relationships with contractors you might be able to make it happen at a good price but on the first one it was good to be able to reduce our costs the best we can and learn what we like and do not like doing.

It is more rewarding than I thought it would be! You do it for the money but there are some awesome side benefits! You employ others and put money in their pocket. You give a homeowner a way out when they thought there was none. You improve the community. Provided you do things right in the rehab you also give a new homeowner a solid property that they do not have to spend time or money repairing. All sides win!

Another added benefit is you get to see if any of the subcontractors or handymen you hired will be worth it to hire in the future for other flips or property repairs. We found the plumber from that flip we now use for all our plumbing situations. Works hard, punctual, fair price, and knows what he is doing. This was a gift that will keep on giving!