I have finally completed my first flip. Initially started looking in Los Angeles, California area, as this is where I live, but the market and prices are insane for someone with no experience and daddy with a fat wallet. After months of searching for a property in Los Angeles I pretty much gave up on this endeavor.
One evening as I was drinking wine and randomly scrolling through Facebook, I came across a profile of an old friend who I haven’t talked to in years. I remembered that he lived in Cincinnati and used to do construction work. It all immediately clicked – this could be a good opportunity. The biggest risk and issue was not living or knowing the area – I have never been (to this day) to Cincinnati. This would be my first ever flip, thousands of miles away, with no way for me to physically be able to help/do anything.
Two mitigating factors were:
1. Cincinnati is a reasonably priced market, in comparison to California. I would actually be able to afford something, worst case scenario, if I can’t sell, I will be able to afford a mortgage payment and rent the property out. I thought, if I even make $1, it would be great experience, it would be worth it.
2. I do technically have feet on the ground and someone with experience in construction. And most importantly I trust him, or I made myself belief I trust him. I thought, ok, as long as I write everything down, put everything into a contract, everything would be ok.
With these two mitigating factors I decided to take a leap. My friend in Cincinnati eagerly agreed to get into the partnership, and although it was not easy and we had some very heated discussions with phone hang ups and swearing, after some 7 months we finally sold. There are too many things I’ve learned from this experience to mention here.
My top three suggestions for beginners would be:
1. Be as conservative as possible – when you are estimating your ARV, go for the lowest estimate. When you are getting your rehab cost estimates, go for the highest amount.
2. Write everything down – document, document, document. Write everything in the partnership or any other contracts, and go over everything together before signing so all parties are on the same page. Who does what, when, how much.
3. Find a mentor – its one thing to google and youtube something, but having a live resource you can call up and talk with is priceless.
I am continuing my investment adventure in Cincinnati and am currently working on another SFR flip and a 5-unit BRRRR.
First Ever Flip:
Purchase Price - $105,000
Repair Estimate - $40,000 (actual $50,500)
ARV Estimate - $185,000 (sold for $200,000)
https://www.zillow.com/homes/1141-Brooke-Ave-Cincinnati,-OH,-45230_rb/34282255_zpid/
