All Forum Posts by: Bill Hinshaw

Had a similar experience with my wife. She's really good at interiors. I thought I was. How hard can it be, right? I've finally given over 90% of our finishes to her. I do spend a lot of time on houzz trying to educate myself, and I look thru all the flips in my farm to make mental notes of finishes I like and dislike. But mostly, I let her drive that piece.

The finish is one thing that A) has a huge impact on the success of the flip and B) is totally within the flipper's control (unlike curb appeal). 

I do often see houses where the flipper, probably a male who was good at rehab, did not put much thought into the interior finish. You can tell. And I'll add that spending more on a higher quality finish does not necessarily equate to a good look.

I echo Matt's question. 

What is the worst that can happen to you on this house? Granted, we don't know the full details. From what you've described, spending 89k on a live in flip that is potentially worth 170k seems like a very conservative venture with at least one additional possible exit (it would probably make a great rental). The questions about the kitchen and drive way seem like the right questions to ask, and maybe the answer is you have to take a little less when you sell. Even then, this seems like a wise first venture into real estate investing.

I've never done a live in flip. I would guess one of the dangers with it being your own home is that you would over rehab or over customize.

I'll share my experience @Account Closed

My first rehab was a rental in a Class B area. The first thing I did was to pick out the laminate countertops. I wanted to use the in stock sheets at Lowe's, so my selection was very limited. That selection dictated the color for the cabinets, tile floors, back splash, etc. Everything matched, but I was not happy with the overall presentation once it was all done.

For my first flip, which was in a class A area, my wife and I spent hours on houzz.com and looking at what other rehabbers had done in the area. We noted "looks" that we liked and others that didn't work as well. We went for a look instead of basing all the decisions on hardwood floors or a specific countertop. 

If you are married and your wife is good at interiors, give her control. I love picking that stuff out and really wanted to be the decision maker on that first rental. That was a mistake. I tend to look at things individually, and you really need someone who can see how it all fits together.

The systematic approach with the spreadsheet is a great idea, and something we are trying to document now so we can re-use on future flips.

One reason to get an inspection is that it gives you a good punch list for what your future buyer's inspector will be looking for. Some of the stuff is meaningless, but a buyer will still ask you to fix it if it is on their report. Better to know up front and get it taken care of.

If the home has fallen out of contract, there may already be an inspection report out there. Can't hurt to ask the selling agent if an inspection report is available.

I always prefer an option period whether you get an inspection or not. It gives you time to check over your numbers and make sure you have a solid exit and rehab plan.

Is a seller's disclosure required in Kentucky?

I recommend working with the city and pulling whatever permits are necessary. My limited experience is that they are pretty easy to work with if you are forthright with them up front. 

Amazing! Congrats to you and your husband. 

@Bryan C. Thanks for the details. Looks really good, and I look forward to seeing the results when you are done. Are you guys adding a garage conversion for $1200, or modifying an existing garage conversion? That seems pretty good if you can add a garage conversion for $1200, especially if electrical and plumbing are involved.

@Tyler Weaver Our first flip was a 525k house where we spent over 150k on the rehab. We basically gutted it and started over from scratch, including modifying the existing layout. Our second house should sell for 500k, and we expect to spend $75k on the rehab. So yes, Bryan and I are operating in entirely different markets. I'll spend over $6000 on appliances where Brian plans to spend $2200, and that 3x factor probably translates to all finishes (marble vs ceramic, vinyl plank vs solid hardwood, etc). That's why I asked about the non-cosmetic part, but it sounds like most of Bryan's is cosmetic on this one.

Congrats on getting your 2nd closed. Profit of 20% of ARV sounds fantastic and beats what I am doing. I was at 14% on my first and expect to come in around 10% on my second.

What non-cosmetic items will be included in your 22k rehab? I'm always amazed when someone puts a number like 22k out there for a rehab. My subs won't get out of bed for less than 22k :). I would love any tips you can share on how you keep your rehab costs low, especially on the non-cosmetic side of things.

@Hattie Dizmond

Crazy - the house is in Canyon Creek in Richardson, but it is in the Plano ISD. The Canyon Creek area is basically cut in half by the school districts. I haven't figured out exactly where the line is.

Hey Hattie! I got that one from a realtor friend, and it was sitting on the MLS. I think you are referring to Prairie Creek elementary, but this house is in Plano schools. We knew that going in, but still felt like the market would support a flip.

There is actually a tear down in that same neighborhood currently listed at $989k. Everyone I've talked to is pretty sure they've overstepped the market, but it will be fun to watch and see if they can get it. Along with our property, there are 2 flips currently on the market, another one that just went pending, and another that is in process of being rehabbed. We are on a beautiful creek lot with a nice back yard space. We should do ok with a strong spring market.

We've got a pretty tight spread on this one. Our anticipated profit will be < 10% ARV. We wanted to focus on execution to budget and schedule, and show that we could improve our efficiency compared to our first.

Plumbers.

So we got a quote yesterday on the house we are currently working. It looked pretty good as far as plumbers quotes go. We had discussed attaching fixtures as part of the job, but noticed that it wasn't part of the written quote. We're assuming he included it in the number, but better to double check, right? Nope - attaching the fixtures will be an extra $1500. Seriously? Maybe 6 hrs of work and < $100 in materials for $1500? How do you justify that? 

We're drifting off topic a little bit :)