I spent all of 2014 and half of 2015 learning and prepping my self mentally to take the first step into real estate investing. Finally in late 2015 i set up my business entity and sought out for fix & flip deals. My analytical nature allowed me to create quick scenarios for a calculated risk.
The house I purchased was a bank owned property in Livonia. Brick ranch built in the mid 1950s, detached garage, full basement. A high pride of ownership neighborhood like many of the blue collar areas in that part of town.
I did my analysis based on only a drive by, as it was still occupied (even though the bank said it was VACANT!!!) Interior sight unseen as are many foreclosure properties. The purchase price was $87750 and the comps I ran that time were in the $150k's. Anticipating a rehab of budget of $25,000 (based on colleagues of mine experience on ranches of this size in that area) I was ready to hit the pavement.
As I gained entry 1 months after the purchase, I found that the plumbing was galvanized and the electrical service was still on the old style fuses. An unexpected obstacle.
I hired out some of the larger scoped items and did the rest of the work myself. I'm a full time engineer and so I would travel to Livonia from my work in Warren 3-5 days a week. Balancing family, work, and real estate dreams was not easy.
From initial cleanup (hoarder house), to demo, to managing the sequence of rehabbing, there were obstacles. I experienced hiring and firing two subs, translating to time delay due to rework needed. I experienced the hardship of taking on a large portion of this rehab.
The rehab was completed in about 4 months.
The numbers :
Purchase price : $87,750
Retail price after rehab : $160,000 (comps trended up during the 5 months of initial purchase !)
Minus closing costs, rehab, etc. Net take home was $25,500 !
Pretty proud for my very first flip. I'm confident in my analysis and can't wait for my next one and scaling up !!!
