Hello folks!
I'm new to this forum, and eager to gain more knowledge, as I'm on the cusp of making bigger investments. However, I'm lacking a plan to move forward.
I want to share my story and get some feedback. I live in Ft. Collins, Colorado currently.
My story: Graduated college, learned multiple trades (tile, stone, trim carpentry), worked as a contractor, remained poor, changed course, college again, and went into Healthcare, built a nest egg. I always wanted to fix up a house and sell.
Feb 2013: Bought a house in Orlando, Fl (College park) $112K cash. Built 1939 2 bed , 1 bath, 900 sf. Moved there from Colorado, temporarily. The House was pretty beat, termite damage, etc.
This was a conventional sale, used a realtor to buy, didn't understand foreclosures or short sales or auction process. And I still don't understand any of that honestly.
I knew the comps, and knew the market was close to its nadir, so I honestly knew it was the right call. Still scary though, I'd never bought a house! It was the classic cheapest house in the most expensive neighborhood.
This was the kitchen during demo.
I won't go through the entire process, but my remodel did not add square footage, as I'm not comfortable doing that by myself.
I did do a complete kitchen, bath and front porch tearout. Did some plumbing and added a couple circuits, nothing major electrically.
With a few minor exceptions (landscaping), I did every bit of the work myself. I even had to buy new tools, as my set up was still in Colorado!
This was not really a "flip". I bought the house for my wife to live in as she did clinicals in Florida for 2 years. I knew I would sell it, so I decided to make it my project.
I Invested about $15 K and about 5 months time into this project.
We did live through the remodel, which definitely poses a challenge for most people. To make matters even more difficult, I was living in Colorado while my wife lived in the house. I was commuting once a month to Florida from Colorado. Damn, that sucked!
As we got close to selling time, I did my best to research comps. I put together a comprehensive spreadsheet. I wanted to squeeze out as much value from the house as possible.
Because of this I decided to sell the house without a realtor. Many people told me this was a terrible idea. When I did the numbers, I decided I had to try to sell without a realtor, I felt the entire process was a total racket. But I also knew FSBO without an MLS was a waste of time.
So I simply bought an MLS number for $300 (still a rip off), staged the house, took the pics, marketed and did the showings. Here's how it looked at selling time:
Poured and polished concrete counter tops with recycled glass aggregate from beers I drank! Everyone told me granite was the only way. Whatever (so cliche). Less than 1/4 of the cost, but labor intensive and you'd better know what you're doing.
Obviously, I could go into more detail about the remodel work I did, as this required a lot of forethought as well. But I'm more interested in what people think I should do going forward.
In the end, the house sold for $212K. This was over asking price. I had two offers in 48 hrs. I did the showings myself and was as honest as possible to any potential buyers about the quirks of a house built in 1939. I used the same titling company I had used to purchase the house at closing (saved me $). Inspection went well.
To be sure, nobody knew this house better than me, definitely not a realtor.
In the end, I profited $85k. I will not be hit with capital gains, as my wife lived in it for 2 years.
Lessons learned:
Timing is everything. The current market is not conducive to profits such as this. (And this is why I don't know how to move forward).
Make it your Job. I have to devote myself fully to a project or it won't get done. Not just swinging the hammer..this includes marketing and research.
Research comps. Easily done via Redfin or other websites.
Selling without a realtor is possible and potentially easy. Yes, I sold in a good market, making things much easier. That being said, if you know the process, do your research and be honest and friendly, it's worth a shot in any market. I'm kinda surprised the profession is not yet obsolete.
Questions for the pros out there:
How do I reinvest? I am now in a new area (Ft. Collins, CO) and the market is obviously super expensive. A conventional purchase is out of the question. I feel the market is now absurdly over speculated. I cannot find any value here!
Foreclosures are rare and confusing. I've been to the county auction, but I do not feel comfortable bidding a house when I can't inspect to know the condition. Additionally, it's all cash! I have a lot , but not close to enough.
The only way forward as I see it is to find a house before it goes to auction, and this process is again confusing. Any advice?
My goal is to find a rental here (college town, built in supply), but it is very discouraging. I'm more than happy to make this my job again, but in this market, my profit would be zero.
Ok experts, let me have it. And thanks in advance!
