Just closed on my 4th flip (2nd that wasn't a live-in flip) in Ann Arbor, Michigan. Didn't end up being my favorite project as the house was just a normal subdivision house that had serious deferred maintenance. My 1st flip was a cute little brick ranch that had lots of character left in it and it was fun restoring it. This one was just beat up by occupants who did not take care of the home.
There were three hurdles on this project and two larger decisions that were learning experiences.
The first hurdle was that it was occupied. We filed for eviction but worked out a cash-for-keys arrangement for $2,500 and got it within 2 weeks. We didn't have to do that and would've gotten it only a few weeks later. However, I knew that we'd make money on this flip so I felt that it was the right thing to do. I wanted to give the former owners something to help them out, hopefully ease a small bit of the pain of eviction, and create a smooth transition. It worked and I'm glad we did
The second hurdle was the yard. It was a disaster. The "grass" in the back was about 3 feet tall, full of those prickly weed trees. I ended up doing the landscaping. And by "doing the landscaping", I mean making it presentable. Nothing fancy, just chopping tons of stuff down, pulling a lot of weeds, getting rid of lava rocks, and tossing down some mulch.
The third hurdle was the painting. The whole house needed to be painted, but because of the occupants we didn't know when we'd get possession. Consequently, we couldn't schedule a painting crew. By the time we got around to getting quotes, it was the middle of summer (prime painting season) and the quotes were outrageous. For a 1,475 sq ft house, I got one quote for over $8,000. I ended up doing a large portion of the painting and saved a few thousand until I found a guy who helped finish it. I'd have taken the profit hit if I got a good quote. It was a lot of work going in on weekends or after my day job and ruined the project for me (in terms of enjoyment). As a side note, if anyone knows of a competitively priced painter in the area, I'd love to get the info.
One of our bigger decisions was deciding whether to paint the kitchen cabinets white. They were honey maple and a little outdated, but in good shape. Having a professional redo them (have to be careful who you let paint your cabinets) would've been $3,000. My wife convinced me to leave them as is. It was the right choice in the end, I think. The kitchen looked fine, and we ended up selling to someone who is going to rent it out, so it didn't matter that much anyways.
The second was how much repair to do to the outside (fascia had some rot in a number of places and the fences were roughed up too). We decided to fix the bad spots in the fascia and leave the rest. This was also the right choice. It would've cost around $5,000 to replace everything (fasica and fence) and it became clear that we wouldn't have gotten that back as neither were crucial to making the house move-in-ready. This neighborhood is full of starter homes and people don't expect perfection, so know your neighborhood.
I put it as Coming Soon on Zillow and received a cash offer before even listing it on the MLS. I could've probably gotten a few thousand more by going with a first time buyer, but I wanted to close quick and didn't want to risk the appraisal coming back low.
Rough numbers were as follows:
$161,100 for purchase price, closing costs, eviction expenses
$16,500 for materials
$11,200 for labor
$12,900 for closing costs
$201,700 all-in
$243,000 sales price
$41,300 profit
