All Forum Posts by: Jessica G.

Thanks guys. It turns out this is a crappy time to list a house; sales have slowed way down because it's the end of the summer. I hear things should pick back up around Labor Day, but hopefully we'll already be under contract by then. We went on the MLS on Wednesday and have had six showings. Only one agent left feedback, and it was that the house was very nicely updated but was "too old." Hmm, maybe you shouldn't look at houses built 60 years ago then.

I don't have all my costs broken out yet (maybe by tax time), but here are some ways I saved money. Mostly, I spent a lot of time shopping around to find good deals on supplies. I didn't use anything low quality; I just searched for good deals on good stuff. This was especially important because the 1958 kitchen had a ton of oddly sized appliances, and buying them at retail would have cost a ton. The second price in each set is what I think I would have paid at Home Depot.

Purchased on Craigslist

Kenmore stainless steel wall oven (almost new; 24" is a hard size to find) -- $550 vs. $1200

Stainless vent hood (new in box) -- $200 vs. $400

Purchased at Sears Outlet

Whirlpool stainless dishwasher (new, tiny hidden dent) -- $275 vs. $500

Purchased at discount builder supply stores (Habitat for Humanity REstore, Seconds and Surplus, ShoptheBoss.com) All this stuff was brand new in the box. 

4 brushed-nickel ceiling fans/lights -- $160 vs. $400ish

2 brushed-nickel vanity lights -- $40 vs. $100ish

4 24"x96" granite slabs -- $400 vs. $1,500ish

Undermount sink $150 vs. $250ish

660 sq. feet of handscraped engineered floating wood floor -- $660 vs. $2,000+

40 sq. feet of glass mosaic backsplash -- $40 vs. $320ish

Ceramic tile for master bath -- free (I used some the people who sold us our house had left in the garage) vs. $200ish

1,000 sq ft of FHA-compliant carpet installed with pad -- $1,100 vs. $2,000ish

Hi everyone,

I just finished up my first true flip, and I had some good subcontractors help me out. I want to pass on their information in case you are looking. I can only do one house every few months, so as much as I'd like to keep them busy myself, I can't! They work in Dallas, Fort Worth, Arlington, Mid-Cities, wherever. 

Tell them Jessica with the flip in Hurst recommended you. 

Handyman -- Willard Seals, Personal Touch Contractors. This guy is AMAZING. Competent, trustworthy, personable. His hourly rate is very reasonable, and he can do pretty much anything. I literally would not have finished this house without his help. Here is his Angieslist link: www.angieslist.com/companylist/us/tx/mckinney/the-...

Painters -- Hinton Services. Patrick Hinton did the wallpaper removal, framing, drywall, and interior and exterior painting. He did a fabulous job on the wallpaper, framing and drywall. His pricing was incredibly fair. The painting wasn't as awesome, but still good. I think his regular crew wasn't available while he was doing my house, which made things more difficult for him, but it got done and it looks good. Here is his Angieslist link: www.angieslist.com/companylist/us/tx/dallas/hinton... 

I have a few more recommendations (electrician, flooring), but I'll wait and make sure this post is even allowed before I add them. :)

Sure @Account Closed Here are some of the biggest issues that I am trying to learn from:

1) I got a written inspection report before purchasing the property, which, duh, of course, right? Well, the inspector flagged a bunch of "issues" that aren't really problems at all in a house built in 1957... but sound scary to average buyers. Now that I am selling, the TREC seller's disclosure form instructs me to attach a copy of this inspection report to provide to buyers. I'm unhappy about that, because I don't want people freaking because the inspector says the house needs an upgraded electric panel. I've had two licensed electricians take a look and they both said it's fine, safe, and compliant with city code due to grandfathering. Same issue with some plumbing and natural gas fixtures. Also, some of what he wrote is inaccurate. He said the automatic opener on one of the garage bay doors is broken. Um, no dude -- there's no opener even installed on that door. Not to mention, about 70 percent of the stuff he flagged in the report is no longer relevant because I've done so much renovation to the house.

2) When you use a hard money loan, you have to pay for the renovations twice -- once up front, then again when you actually have the repairs performed. The lender reimburses you, but only after inspecting the work. I knew this in my head, but in practice it was hard to time projects according to our reimbursements.

3) I didn't have an airtight scope of work, which may have been my biggest error. Next time I will plan and prioritize literally every single thing I need to buy and do. I will have a sheaf of spreadsheets that I will consult every three minutes and I will be proud of my organization. My planning was way too loosey-goosey and I am lucky I didn't land into big trouble either financially or with the rehab. 

4) I undervalued having a contractor manage the project instead of me. I thought I could manage the rehab 100 percent myself and even do some of the simpler projects and save money. Well, without owning all the tools a contractor will have in the back of his truck, I think it was just as expensive doing it myself because of the millions of Home Depot runs I had to make, and how slow I was. And I underestimated how much upper-body strength, patience, and experience you have to have to perform this kind of work, even things I thought were simple, like installing floating flooring and tiling a bathroom floor or backsplash. And being on the job site all day every single day was tiring.  

Hi everyone! I haven't really posted in about five weeks, and this is why:

http://imgur.com/a/TJ54Z

My first true flip! I made a ton of mistakes and learned from every single one. My "plan" was simply to follow the advice in both of J. Scott's books as closely as I could (I even took them to a copy shop and had the binding cut off and holes punched so I could put them in binders). Next time I think I'll be able to spend less money and less time. Onward!

Let me know if you have questions. There is some commentary in the photo album.

Rough numbers:

Purchase price: $93,000

Rehab: $14,000

Cost of hard money loan & fees: $4,000

Commissions & selling costs: $8,000

ARV: $140,000 to $145,000

In a couple of weeks, I plan to put a rehab the market. It includes a permitted addition made in the 70s, turning a 3/2/2 into a 4/3/2 (two master suites and a hall bath).

I have a question: Currently, the master bedroom is accessed by walking through a connected bedroom, so I wouldn't feel comfortable marketing it as a 4-bedroom, just a 3-bedroom with a den, even though the walk-through room is a legal bedroom.

For a few thousand dollars, I could extend the hallway through the old master bedroom and put a doorway directly into the new master bedroom. Do you think this would be a worthwhile renovation? The affected bedroom would lose a chunk of square footage.

I don't see any 4-bedroom OR 3-bathroom comparables in or near this neighborhood -- they are universally 3/2/2s built in the 50s -- so I am unsure of the value this renovation would add. (I do have emails out to some Realtors who specialize in this location, and I'll make some calls tomorrow.)

The numbers on this project are tight already, so I am very wary of over-improving, but I do want to maximize my return. Along with making needed repairs, I have already added or plan on granite countertops, SS appliances, engineered wood, and new carpet, which will make me just as good or slightly better than the comps. I have recently been affected by a low FHA appraisal, so I don't want to make that mistake again.

A secondary sort-of question -- the inspector told me the electric panel could use an upgrade, BUT a master electrician told me it would be a very complicated project because there is no option to just put in a new panel; it would involve the meter and new wiring and $2,000 in labor. This leads me to believe that the other rehabs in the area are NOT re-doing the electric, which I'll confirm with a Realtor. Since the electric is safe and code-compliant due to grandfathering, I do not plan to touch it. Are my instincts correct?

Any input is appreciated. Thanks!

Hello, are there any investors out there in the Johnson County, Texas area? Cleburne, Alvarado, Burleson or any of those smaller towns or rural areas south of Fort Worth? I need some advice and expertise. I will take you to lunch in one of those diners along the farm-to-market roads!

Oh, and I think the staging helped a LOT. The house looked great with just $500 worth of rental furniture and IKEA knicknacks, and the MLS photos were amazing. Furniture made the bedrooms look bigger and defined the combo living/dining spaces. Even though we were priced a little ambitiously, we had tons of showings and a quick offer.

Yep, we closed. Final numbers were not as good as anticipated because of a couple of disappointing actions by the appraiser.

We put it on the market at $179K. We got an offer within a couple of days from an FHA buyer for $165K, and they accepted our counter of $172,500. After the inspection we settled on $2K credit for repairs (she wanted the landscape graded, new fixtures in the bathrooms, and a few other small things).

I should have met the appraiser in person, as I have heard advised a few different places, but I thought sending along a list of repairs and upgrades would suffice as property values are up so much in the area, and the comps seemed obvious to us. 

Well, the appraisal came back at $160K. We appealed with a list of better comps, but after taking a week to even look at them, he ended up not adjusting the appraisal. 

The buyer offered to pay $160K with no concessions (of course she did) and we sadly agreed. 

On the morning of the closing, I pulled up to the title company and reached for my phone. Saw texts from my husband saying, "Call me as soon as you get this."

The appraiser decided the day before closing to deny approval of the loan because there was flaking paint on the exterior of the house. This was not mentioned by him or anyone at any time before the day of the closing. In the appraisal report, there is a half-sentence mention of the condition of the exterior paint, but it does not indicate in any way that the loan would not be approved because of it. (The paint, 8 years old, looks good enough that I thought our rehab dollars would be better spent elsewhere.)

(Side note -- does anyone know how to file a complaint against an appraiser?)

So we had to have a company come out and paint the exterior as quickly as possible, at a cost of another $1,200. We closed three days later.

So... final numbers after subtracting the cost of the rehab SHOULD have been about $30K profit according to our contract price. Instead, because of a very zealous FHA appraiser, we took home about $19K.

This was our first home, and owning it through the the bubble, the recession, foundation repairs, terrible tenants, and more, I am just happy to be finished with it and moving on to other projects. I learned a TON rehabbing it and selling it, so the experience, at least, was valuable. 

Everyone, thanks so much for the input. I tend to get obsessed with things and go all-in right away, and it's hard to maintain perspective, which is why I asked so plaintively for advice. I am less panicked today.

It's strange for me that I love REI so much. I have always liked houses, construction, and real estate -- my mom is an architect so I grew up around foundations being poured and the pine smell of houses being framed -- but I have never thought of myself as a "numbers" person. Now I am elbow-deep in spreadsheets, and I love it.

As far as our financial situation goes, what keeps any young(ish) couple from saving as much as they want to? Unexpected medical bills, student loans, having kids, etc. Moneywise, we live very modestly and are fine, but we worked hard to get to "fine," and I want to keep us there. 

We have capital earmarked specifically for REI, and that is why we are able to qualify for hard money loans and conduct rehabs.

It's just hard to see that I made $40,000+ in instant equity on my very first real estate deal, which is almost as much as I make in a year of teaching. My kids are growing up fast, and teaching is all-consuming work in a way that's hard to explain. I think it's reasonable for me to want to do something that will allow me to focus on my kiddos more. 

I am not worried about losing my W2 job, because my husband has great credit and a much better income than mine on his own. He is happy to be the credit-score-and-income muscle behind our loans. He just wants me to try to bring in an income roughly equivalent to what I make as a teacher, but he doesn't care where it comes from. After a rough start and some major public-relations work on my part, he now totally gets the real estate investment thing and helps me as much as he can. 

I have been thinking hard, and will continue to do so. Other options on the table include giving teaching another year or two, and/or trying to switch to part-time or a job with a shorter commute. I have a master's degree in my teaching field -- plus, I am an awesome teacher if I do say so myself -- and it does feel wasteful to give it up. 

I will definitely post an update. I feel sometimes like I am the most emotional poster on BP! Everyone else seems so calm and rational. (Now someone is going to pipe in and tell me that being emotional will make me a crappy real estate investor.)

@Engelo Rumora 

@Bill Jacobsen 

@Tyler H. 

@Elizabeth Colegrove