So quite a bit of time has passed since I last posted one of these but I wanted to get back into the habit of composing a quick forum post on each flip since I’ve gone from flipping part-time to full-time. Since our very first project, we’ve had a large array of experiences but I’m not going to dig into the nitty gritty details of projects completed in the past. No, I am here to discuss our 4th flip and first condo renovation.
It all started when I got a phone call from my agent about a recent property they had put under contract from an online auction. The property was a condo situated about 30 minutes from my primary residence. I had never purchased a property from an online auction, nor had I ever flipped a condo so I had my reservations. When I took a closer look, the property seemed to have a lot of potential. To start off, it was in very good condition; it was actually livable, which is usually not the case for 99% of the homes we put under contract. The kitchen cabinets were salvageable, the systems were fairly new, and nothing had to be done to the exterior (windows, siding, roof, landscaping, etc.) because it was a condo with an association. Looked pretty good to me…
Our first little surprise upon closing was something called a “Buyer’s Premium.” I’d never come across this before as I had never bought a house from an auction so I didn’t know to account for this in my buying cost estimate. From my experience, I’ve found that if you’re paying cash for a property, closing costs hover somewhere between 2.5%-3% of the purchase price. This buyer’s premium added an additional 5% of the purchase price to the final tab. Ouch. After doing some research, these premium percentages seem to vary depending on the auction company so make sure to do your homework! To run you through the numbers, we purchased the property for $115,450 and had to pay $8,565 in closing costs (or just under 7.5% of the total purchase price).
As for the rehab, everything went relatively smooth. I do have to say that removing, cleaning, repainting, and rehanging kitchen cabinets was not as easy as we had thought. We did save a couple thousand dollars doing this but spent an inordinate amount of time completing the task. One other thing that might be worth mentioning was the plumbing; I’ve never seen supply and drainage lines run the way they were in this condo, which made installing the new vanities, tubs, shower stalls and fixtures challenging. In total, we spent roughly $16,000 on the rehab and $2,500 in holding costs in just under 2 months. This included new paint, carpeting, appliances, laminate flooring, bathrooms, countertops and other miscellaneous upgrades.
After listing the house, we had a full-price cash offer in less than 36hrs. That’s a personal best for us. The sales price was $179,000 and after all was said and done, we paid around $10,700 in closing costs on the way out (or approximately 6% of the sales price). I’ll let you do the math on the profit for those 2 months of work.
I’m a little late in posting this as we’ve already completed another house after this condo and are halfway done with #6. Those posts will follow as soon as we’re through each closing. Thanks for reading and we hope to supply you with more reading material soon! (And hopefully more regularly).
I’ve included some before/after photos below and if you haven’t read the story of my first flip, here’s the link. It’s both informative and entertaining!
https://www.biggerpockets.com/forums/223/topics/361413-1st-flip---learning-the-hard-way
