All Forum Posts by: Jim Cran

Great! Location?

When's the next meeting? Would love to join.

Dave Charron Dave, when you say "make $40k" is that net profit (gross less ALL expenses included taxes, commissions, holding costs, etc)? If so, what would your gross need to be to net $40k?

@Jeff Berg The driveway was crumbled in large areas. Rather than replace only sections and have mismatched sections, it made more sense to spend a little more to replace the entire thing. We've used this concrete company on previous flips so we asked him to throw in the patio as well, which he did. 

The front windows pictured have been replaced as they were single pane and in bad shape. Three large windows are installed now. 

But your point about the curb appeal is well taken and we are now considering replacing the garage door (thanks for the link!). My wife hated that front door from the beginning so that was actually on the plan to replace. Oh, and the wrought iron was removed for the concrete pour and replaced with a 2x4 for now. I would love some suggestions on what to put in its place. We were thinking wrought iron again. Seemed like a clean and modern way to go, no?

The question we always ask is whether or not spending additional money will increase the sale price of a house and/or make it sell faster (the former being the primary question). "Put the money where the water is" has been our philosophy and has helped get us into a sales contract in as little as 12 hours but not more than than 20 days. 

Christopher B. Fair question. It is a lot of work ("work" is relative - we aren't swinging hammers) but our approach is probably a-typical among flippers. If we can make $20k minimum, we are happy. If we can do that 5x per year plus have a few rentals, we can live comfortably and continue to improve. I have a full-time job that supports us so flipping is extra income but eventually, I'd like to leave the corporate world via real estate investing. So, while $20k is the minimum target, we are averaging closer to $40k so far. Not bad considering all through MLS so far. We hope to eventually hook up with wholesalers but no luck yet.

@Jeff Berg Hi Jeff. Your question is a good one and I would answer it differently if we planned to put it on the market in a non-winter season. Since the ground is likely to be covered with a foot of snow, there is no plan for the exterior aside from what I've already mentioned. If it were any other season, we'd plant new greenery and colorful flowers, trim all trees and bushes and put down black mulch along the base of the house. But since it is winter, the expectations of the buyer toward landscaping are going to be low. Everything looks dead anyway so money that would otherwise be needed for landscaping will instead go toward making the interior "shinier."

I thought it would be fun to post progress as my wife and I flip house #5 from start to finish. I'm NOT posting this in "Success Stories" since the proof is in the pudding as they say and I don't want to assume success. Feel free to ask questions, I will do my best to answer in a timely manner. I may ask the BP Community for suggestions via this post as well.

Purchase Price: $125k

Rehab budget: $68k

Timeline: 4 months from close (9/30/16) to putting it back on the market

Target sale price: $225k-$250k

Net Profit: ? We went into this calculating a net profit (after commissions, taxes, holding costs) of about $20k. But here's my question to the BP Community tax experts: given the above, what net profit range is realistic and why? I will use this info to better calculate potential profit on future houses we consider for flipping.

SCOPE: new floors, cabinets, countertops (quartz), 8ft island with butcher block and prep sink, relocate powder room, add laundry room w/ stacked washer/dryer, new driveway, new vinyl siding (removed brick facade on front of house), new furnace/ac, paint throughout, carpet bedrooms, minor updates in bathroom, new front windows, new roof, update fire places, new appliance suite, fixtures, new lighting, updated electrical, some gutter and drainage work, new concrete patio to replace existing pavers.

I drew this floor plan using MS Visio. The focus of this flip is the kitchen as it will be the selling point of the house. Blowing out walls and adding headers to create the open floor plan buyers see on house-flipping TV shows and want. Existing skylight will light up prep sink area of the 8' island while (2) pendent lights will light the rest of it.

BELOW: Small and poorly laid out original kitchen. Fridge is around the corner, powder room behind fridge (not shown).

DEMO!

Below L-R: new powder room, laundry room; closed off side door and window to allow better flow of countertops along that wall. 

We had to cut open the floor to access the furnace for replacement. An unexpected expense.

BELOW: new header in place. Knotty pine ceiling will be painted white. Beams will be stained to match new engineered dark floors. Chandelier will be replaced with modern one.

Let me know what you want to know and I will do my best to answer. 

Nancy Mullins What was your Reno budget? How were the returns if I may ask?

Eric P. That's disconcerting info because we didn't factor in another 15+%. I have another post requesting CPA referrals in my area. Clearly, there's more homework to do before celebrating a "successful" flip. Thanks for the response!

@Don Petrasek this is the sort of local feedback I'm looking for. Lakewood is getting getting hard to find good deals and have begun expanding search but hadn't considered Berea. What parts of Cleveland are you referring to aside from what @Adam Craig mentioned? Anything west side? Maybe West Park?