All Forum Posts by: David Hayes

Welcome @Kara Smith! Midwest is definitely a great place to be investing, lots of knowledge to be gained on this site! 

Welcome @Julie Posey! Cincinnati is a great place to live and invest, are you from the area? What neighborhoods are you looking at? Best of luck as you start your journey!  

@Kathy Argento - Did you buy a house from Build?  If so - that might have been the Hyde Park house I was referring to! It also sold in August, if it is I would be super curious to see how it's going.  Have you done other flips in Cincinnati?  How is it working from a distance?  

Cincinnati overall does seem to be doing pretty well for flips, but with this being my first one down here, we'll see.  Pretty much anything in Northside is really hot right now, people who are still somehow getting houses low there are making a killing.  Madeira has $200k+ houses that are getting knocked down to build $500-$600k houses by investors and builders.  Oakley continues to be a pretty good place as well.  If you can get one in Wyoming, that is an awesome area as well, there is actually a couple there that look to have some pretty interesting potential, but would be massive rehabs but potentially high upside. 

@Account Closed - thankfully my wife was actually able to swing by and see the place and take the kids home after I was at the house for a bit and the wholesaler (also a Realtor) office was not too far away, so it worked out.

@Devon Garbus - yes I think you might be right, but I just haven't seen the good flip properties in the lower range recently.  It seems like the $100k range is extremely competitive and margins are very low, not much inventory around here and what comes up seems to go quickly.  That being said I'm also not actively finding my own deals, just bought from a wholesaler, so I think it would be better to find my own and build in a bit more profit on that lower end and get more deals.

So here are my “before” pictures, and general scope of work and timeline that we planned to do at time of purchase (I’ll update later what all we finally decided actually do and more pictures)

plan was to open up this wall by removing the pantry, more open concept feel.

master 1/2 bath

master bedroom...in good shape, all the BR's were fine. 

guest bath, functional, but not in great shape or updated

bedroom

room addition, overall also functional, just not updated - windows were in bad shape

there was a plumbing leak and some water getting in near the bottom of the foundation on the back wall

storage room

deck needs replaced, very bad shape - not installed properly or maintained at all

General Scope of work for our plan:

• New roof/gutters
• Replace a few windows that were broken
• Paint interior and exterior
• New Deck/Patio
• Basic landscaping
• Convert/update master ½ bath to a full bath by bumping out into the kitchen
• Update guest bath: new vanity, tile flooring, new tub, tile surround
• Finish basement
• New electrical box
• Update HVAC in existing room addition: install a mini-split since there was very outdated window unit AC and baseboard heat
• New trim throughout entire house
• Open wall between entry room and kitchen
• New kitchen cabinets/granite countertops, updated layout
• New hardware/appliances/finishes
• Mitigate basement water, fix foundation bowing walls.
• New driveway/front walk-way

Our initial budget for all of this was about $70-$80k. We felt like we wanted to make sure to do things nicer to try to get the higher end of the price range for this area. In addition to the house a few doors down that sold for $370k, there were 2 other houses that sold within the last year on the same street for $400k and $385k, both a little bigger, but not much. Time to start getting actual bids and prepare for closing.

We debated what work we wanted to actually do, much of the house was very functional, but the basement/driveway/patio/roof were big ticket items - so with so much cost just to fix those, we decided to go all out and update pretty much everything. 

For reference, we got the property under contract on July 17th, closing date was August 24th – this gave us some time to start lining up the contractors and get our financing in place. 

@Edgar Aguillon - good luck on your first flip too!  It is definitely a little scary, but also fun to actually be doing it, it was no fun to just sit on the sidelines.  Good luck to you too!

@Merry Briotta - yes they do have properties that come up in Warren county once in a while.  PM or email me if you want me to pass along more info.

@Account Closed glad you enjoyed the post...and confirmed I am crazy ;)  What I didn't mention that might make me seem even crazier is that my wife was also almost 9 months pregnant (we had our 3rd child less than 3 weeks after closing).  So needless to say this has been a very busy last 2 months. For my estimated timeline and repairs, read my next post...

I’ve been on BP for a while and learning lots of great info from forums, other posts/people and of course the podcasts. So I figured it’s time to share one of my own stories currently in progress…who knows maybe it will help someone, maybe someone will read it and help me see how I could have done something better, or maybe this will just be good therapy for me and no one else will read it :)

First, very quick background about myself: I work full time as an engineer, most of my REI experiences are lived out in collaboration with my brother Brian and our ventures in Columbus together.

Background on this deal: I had been looking at "deals" from a local wholesaler for quite a while, really wanting to jump in and try to flip a house but as I continued to run the numbers each deal was just so tight in my opinion, that it was pretty risky and I couldn't find one that made sense. Finally one day I saw one come up in Hyde Park (very nice area in Cincinnati – houses like this don't come up almost ever), I don't remember the exact numbers, but purchase price was about $80k, with ARV ~ $220k+, it obviously needed a lot of work, but finally the numbers actually looked good on this one, I thought it would be an "easy" $30-$40k profit – unfortunately it was gone by the next morning when I put my offer in. I was very bummed. Frustrated that I didn't go with my gut and put an offer on the spot when I went out to see the property within hours of it being listed.

Which brings me to the next day, I got a text from the wholesaler at 6pm that a property just came up in the Indian Hill SD, near Kenwood mall – I was even more surprised by this than I was with the Hyde Park house, because houses in this SD really command a premium and I had also never seen one come up in this area. I was heading home from work and got on the computer right away to look at pictures and start putting my rehab budget together to see if this made sense. Here are the numbers they advertised:

Purchase price: $236k

Rehab: $60k

ARV: $370k

House was a 3BR/1.5BA, ~ 1800sqft ranch with full basement – their rehab included converting the half bath in the master to a full, to turn it into a 3/2.

It was hard to argue the ARV, a house 3 doors down just sold a couple weeks before for $370k, and it had 300 less sqft. So I started looking closer at the rehab. I think their estimate was a bit low for rehab cost based on the pictures, but this seemed to have plenty of margin, so I figured it was worth a closer look. It was already 9pm by the time I ran the numbers and felt good about it. I didn't want to lose this one like I did the night before so I called the wholesaler and he could get me in if I could come over right now. My wife was out and my 1.5yr old girl was sleeping…so I had no choice, I had to wake the baby and head over to the house!

After my walk through at the house, there was no major red flags, so we decided to make the leap, and got it under contract that night. Good thing because they had several people the next morning ready to jump on it too.

That’s enough for this post…more to come on how we got financing, what has been happening with the rehab, contractors, water-mitigation, etc.

If you have any questions feel free to jump in at any point.

And lastly, my question for you…would you (or have you) ever woken up your child to go close a deal? 

PS – my daughter was fine with being woken up, didn’t even cry, I put Mickey Mouse on the tablet and she was happy :) The real question of was this worth it or not is yet to be seen...

Thanks for organizing @Brian Hayes one of these times I will actually come up to join you, I can't make it this week but maybe in April.

Wish I could be there.  Anyone who does attend will definitely benefit, @Brian Hayes  is definitely someone you want to talk to if you are in Columbus.  We have learned a ton from BP and networking and @N.A N.A is doing some great work, our first flip just got on the market a few days ago.