T#3/
HOW WE LOST 30K ON A HOUSE FLIP (and how most newbies will too unless they follow these directions)
Everyone wants to be on HGTV... truth is, 90% of what you see on HGTV is only 10% of what house flipping is.
Picking out floors isn't 25% of the process, more like 1%
π
HOW WE LOST 30K ON A HOUSE FLIP (and how most newbies will too unless they follow these directions)
Everyone wants to be on HGTV... truth is, 90% of what you see on HGTV is only 10% of what house flipping is.
Picking out floors isn't 25% of the process, more like 1%
π
2/
A couple years ago, we bought a house off the MLS (bad to do for newbie flippers). Called the listing agent myself, he was actually the owner too, so was happy to save some $$$ on the buying agent side.
House actually wasn't in bad shape, and had a pool lol
π
A couple years ago, we bought a house off the MLS (bad to do for newbie flippers). Called the listing agent myself, he was actually the owner too, so was happy to save some $$$ on the buying agent side.
House actually wasn't in bad shape, and had a pool lol
π
3/
Seller was broke & needed to move. Got house for 245k. Was probably worth about 275k as-is. (mistake #1).
We thought if we "souped it up", we could get $350k like a house down the street WENT UNDER CONTRACT FOR
Got hard money for it (paying out the nose.)
Closed in 9 days
Seller was broke & needed to move. Got house for 245k. Was probably worth about 275k as-is. (mistake #1).
We thought if we "souped it up", we could get $350k like a house down the street WENT UNDER CONTRACT FOR
Got hard money for it (paying out the nose.)
Closed in 9 days
4/
Our budget was $40k.
- Update kitchen, baths, flooring, paint in and out, replace 20 yr old hvac
DONE
At 350k sales price, we'd be all-in before commission for about 300k. Commissions 25k...Make 25k in 4 months.
then it got bad
Our budget was $40k.
- Update kitchen, baths, flooring, paint in and out, replace 20 yr old hvac
DONE
At 350k sales price, we'd be all-in before commission for about 300k. Commissions 25k...Make 25k in 4 months.
then it got bad
5/
The day we close... that comp under contract for 350k went back on market at $325! (did not appraise). Suddenly 25k buffer (profit) gone.
We thought "if we go BIGGER, we could appraise for 350k "(another mistake)
Call contractor...
The day we close... that comp under contract for 350k went back on market at $325! (did not appraise). Suddenly 25k buffer (profit) gone.
We thought "if we go BIGGER, we could appraise for 350k "(another mistake)
Call contractor...
6/
"We're going bigger! Rip out the master bath, rip out shelves, take down a wall to open space (like HGTV), add a sliding back door in back to see pool!"
Suddenly, budget goes to $55k... "we'll just make $15k now and negotiate a lower commission"
"We're going bigger! Rip out the master bath, rip out shelves, take down a wall to open space (like HGTV), add a sliding back door in back to see pool!"
Suddenly, budget goes to $55k... "we'll just make $15k now and negotiate a lower commission"
7/
"Everything will be fine..."
And it looked smooth for awhile. Looks nice , right?
Well, as you'll learn with flips, things never go smooth 100%
"Everything will be fine..."
And it looked smooth for awhile. Looks nice , right?
Well, as you'll learn with flips, things never go smooth 100%
8/
1) Flooring guy installs floors and we realize later he didn't level floor, so it's the Rocky Mtn. We have to pay 4k to repair floors and reinstall w/ new material
2) Front and back deck needs rebuilding
3) Roof needs work
4) Pieces in baths not up to code...
1) Flooring guy installs floors and we realize later he didn't level floor, so it's the Rocky Mtn. We have to pay 4k to repair floors and reinstall w/ new material
2) Front and back deck needs rebuilding
3) Roof needs work
4) Pieces in baths not up to code...
9/
5) Staging goes 2k over budget
6) Materials "disappear" ... not $5 nails, like $100+ door handles, lighting fixtures, etc.
7) Bathroom door gets busted in master, have to add a barn door for $600
8) Siding breaks off from new sliding door... $400
5) Staging goes 2k over budget
6) Materials "disappear" ... not $5 nails, like $100+ door handles, lighting fixtures, etc.
7) Bathroom door gets busted in master, have to add a barn door for $600
8) Siding breaks off from new sliding door... $400
10/
We finish house in 6 weeks, under contract to close end of month. Buyers "find mold and radon" and pull out. We test both and contractors lied.
I personally reach out to buyers (bypassing agents), meet them at the house and try and work out a deal.. nothing.
We finish house in 6 weeks, under contract to close end of month. Buyers "find mold and radon" and pull out. We test both and contractors lied.
I personally reach out to buyers (bypassing agents), meet them at the house and try and work out a deal.. nothing.
11/
Finally, we get a buyer 2 weeks later, closes end of next month.. but not until we pay 3k more in repairs for concessions and an extra 6k in closing costs
House ended up selling around 330k before commission .
Repairs over 72k.
Finally, we get a buyer 2 weeks later, closes end of next month.. but not until we pay 3k more in repairs for concessions and an extra 6k in closing costs
House ended up selling around 330k before commission .
Repairs over 72k.
12/
In the end, we lost about 30k in 3.5 months. (got 3k back in tax savings as least...)
But at least it turned out pretty
In the end, we lost about 30k in 3.5 months. (got 3k back in tax savings as least...)
But at least it turned out pretty
13/
LESSONS:
1) Buy min. 80% of 'as-is' value
2)Flipping IS NOT "building a dream house." Get bare min. the n'hood has, let paint. lighting,& staging do heavy lifting
3)You'll ALWAYS go over budget 10-20%. Add on top of repairs
4) Only use final comps "for sale" is not a comp
LESSONS:
1) Buy min. 80% of 'as-is' value
2)Flipping IS NOT "building a dream house." Get bare min. the n'hood has, let paint. lighting,& staging do heavy lifting
3)You'll ALWAYS go over budget 10-20%. Add on top of repairs
4) Only use final comps "for sale" is not a comp
β’ β’ β’
Missing some Tweet in this thread? You can try to
force a refresh
γ
