All Forum Posts by: Tilmon Smith

You can still flip in this market but you have to stick with your numbers.  I lose almost every house that I bid on due to being overbid and me not going up in price.  This is both through off market deals and Wholesalers.  Flippers just have to be patient in this market and stick with their numbers or else the flip will not be worth it or even worse, lose money on the deal.

Unfortunately, I have three huge mistakes that are embarrassing but I can provide additional details if selected.

1. Before I was an active rehabber, I was the lender to a contractor/flipper that rehabbed several properties in the area.  I did a lot of research and validated references and felt that it was a safe bet.  Unfortunately, he did very little work on the property and after 2 years, I finally took it from him.  In the end I sold it but lost a lot of money on the deal.

2. I was just starting out and tried to rehab a property with unlicensed contractors and didn't get permits.  Huge mistake that I will never repeat.  The short version is that we got caught about 2 weeks before finishing and I had to rip out all of the drywall and basically redo the project with licensed contractors.

3. I am currently working on a project with a contractor that I had a successful flip with in the past.  Because of the successful flip, I didn't monitor him as closely as I should have and got too far ahead of him with my payments.  He was terrible on the new project and I had to fire him and bring on a new contractor.  Time will tell how much I will lose but I am taking measures to try and recoup money for work not completed.

I think that if you are planning to live in the property with roommates, the strategy could work as long as you understand that you will also have to contribute some cash to the deal.  It will be easier to evaluate once you have a deal and know your numbers.

Hello Tanner,

Please add me to your buyers list.

Thanks,

Tilmon

[email protected]

@Gavin Peacock yes, that is something i have been thinking about and may do so in the near future.

@John McConnell I've been thinking about it for a couple of years but never really moved due to my job commitments.  Once I made a commitment to pursue flipping, I did about 8 months of really looking into it, doing research, reading, setting up my company and getting funds in place.  Once I was ready to start looking at properties, I made my first offer within a week (although it was not accepted).  It took about a month before I found this one.  I did not partner with anyone however the agent that found the property was someone I knew and worked with in the past.  I contracted out the rehab because I have a full time job and doing the rehab myself would not have worked.

Thanks everyone for your congratulations, encouragement and advice.  It is really appreciated and I hope to meet many of you going forward.  For those of you that offer hard money options, I will contact you directly.

@Account Closed Chris, when our family moved 3 years ago, we did not sell our house and instead rented it.  When the renters moved out and I realized how little money I made from renting for 2 years I figured it would be a good time try flipping.  So we sold our house and that was used to primarily fund this flip.  I also used a few credit cards and a 401k loan which is what contributed to my holding costs.

Hello Lamar,

Is this property still available?

Thanks,

Tilmon

I just completed my first flip. It took 6 months from beginning to end and here are the approximate numbers:

Purchase Price - $170k

Closing Costs at purchase - $11k

Renovation Costs - $80k

Holding Costs - $9k

Sales Price - $320k

Closing Costs at Sale - $35k

Net Profit - $15k

I was hoping for profits closer to $30k however since it was my first flip, I'm just glad that I didn't lose money. It was a great learning experience and has given me confidence that I can do this.  Here are a couple of points regarding my experience.

1. The high closing costs at purchase was due to $8k that was due to the homeowners association. I knew about these costs but did it anyway because I wanted to get started and felt that I could make money on this anyway.

2. The high closing costs at the sale was due to $9k sellers help with the closing along with a $3k incentive to the buyers agent which helped move the house along. The house was priced a little high for the market and I didn't receive any offers until I offered the buyers agent incentive. After the incentive, I received two offers.

3. I was expecting renovation costs of around $60k and went over budget to $75k when the house initially finished and had to put in another $5k after the inspection. The primary causes of being over budget were unexpected plumbing problems which then caused extra problems with the drywall and a decision to open up the house after the original budget was established. In looking back at this, we should have anticipated the plumbing problems because the house was vacant for two years and we were not able to turn on utilities until after we owned the house.  We should of at least had a contingency for it.

Now that my first flip is over, I am really excited to keep this going and am currently looking for my next house. I feel that this was a valuable first experience and since then have been increasing my education by reading books and listening to the podcasts. My next step is to use hard money financing so that I can leverage my funds and be able to do more than one house at a time. If anyone has or knows of any houses out there in Maryland let me know. My focus is on Howard, Prince Georges and Montgomery counties but am willing to go to Baltimore if the deal is good.

Thanks Georgia and Sam.  I'll reach out to them today.