$32K Profit on First Owner Carried to be Rental Turned Flip Property
My goal with this blog and future posts will be to keep it short and sweet. There was a lot of drama during this project, but I will save that for the reality flipping shows of the world. I will give you a synopsis of this project and ones that I do in the future.
Location: Brenham, TX
Property Type : 2/1
952 SQ FT
Asking : $49k
Purchase Price : $40k
Down Payment : $4365
Note : $35,635 @ 6.5% for 10 years
Evicted Tenants Time frame - 1 month
Rehab Time - 5 weeks
All in - $30k
Sell Price - $108k
Net before Taxes - $32k
What I learned:
- Over budget for rehab. It will cost more than you or your contractor think. Plus you will want to add or repair something you did not see during initial estimate with your contractor.
- Driving 45 minutes away from traffic is way better than driving 45 minutes into traffic.
- Having a great contractor that allows you to be hands off made this experience great. I basically showed up once a week, pointed, said OK and wrote checks.
- Make sure you have a good idea on what the bottom of ARV would be. I knew going in that anything over $100k was going to be my cream on top. I knew I would still make $20k if I only got $100k.
Before and After Photos:
https://drive.google.com/folderview?id=0Bx83vWbwle...
If you have any questions, leave them in the comments or send me a PM.
Justin
Comments (4)
The title of your post...kind of confused me. This is your first owner carried contract purchase, that you were going to turn into a rental and then decided to flip it, instead?
Not trying to nit-pick, just interested in your backstory. I bought a duplex, live in one half and rent out the other. Now that I have more expendable income I'm thinking about saving up some money and trying to flip a house. Your numbers look like the price range that I'm planning to stay in, at least for my first flip.
The house looks great and it looks like the contractor really did know what he was doing. It's awesome that you found someone to work with that is trustworthy and can get the job done. Good pics!
Julian Caiceros, almost 10 years ago
Sorry for the delayed response, I never received notification of another reply to my blog.
Reason it turned into a flip is I had thought I had found something better to put my money into. The smaller homes in the area that I invest in get a higher per SQ/FT ARV. Even if I were to have fixed it up, my insurance and monthly payment would of only given me about $200 cashflow. I figured I would have more cash to do more with on the next property.
Yes, my contractor made this very painless. Which is what I was looking for all along.
Again, sorry for the delayed response. PM me if you have any other questions and good luck!
Justin Ramirez, over 9 years ago
The After photos look great, Justin. Thanks for sharing your numbers. $32k net is a great pay day!
Doug W., almost 10 years ago
Thanks for reading. Not life changing money, but I will be on to the next one here shortly. Have a great day!
Justin Ramirez, almost 10 years ago