This deal took forever
One thing I learned this year (the hard way) was not to spread myself too thin, I still make this mistake but I’m working to tighten things up. I tried to do way too much this year and it slowed me down on almost all of them, this flip included.
Part of the slow down was because I had bought it at the beginning of Covid19 and I wasn’t sure what the market was going to do. In the future I know that for flipping: momentum matters. Stay on top of the deal every day, make sure you show everyone that you care about the deal more than anyone else, and cross the finish line expediently.
This house was from a wholesaler, I paid 57k which was MORE than the 54k asking price but I knew the deal made money and I didn’t have any other deals lined up. It didn’t need much work and it was in a hot area, when a deal makes sense it’s important to move FAST LIKE LIGHTNING on the deal.
We didn’t have to do much to do this deal. The interior was mostly fine, we put a new roof on it, cut ~5 trees out from the front, put a new driveway and brick walkway, fixed the (gorgeous) back deck, and redid some of the back brick work way on the walkway. Overall a pretty simple deal and like usual I probably did more than I had to.
The house had 5 offers the first day and 3 of them were over asking price. We accepted the best offer and they closed without an issue. Flipping is so easy bro 😉
I funded this deal in a weird way. Mostly private money but I put a lot of my own money up as well, I paid out a high percentage of net profit in exchange for no draws and no interest payments, which I sort of like because it removes all the pressure that flippers usually have to deal with to get deals turned.
However, it also means I have to put up more of my own limited cash than I would like and I have to split a bigger portion of the deal than I would if I just raised the bulk of the money needed (90%) and paid an annualized rate at ~9%.
That said, I LOVE that I did this for my first two flips and I recommend other people to consider the same. Using a profit split and no interest payments takes away a lot of the risk of flipping which helps tremendously for getting off the ground, once you have some momentum and confidence then I think it’s more important to reduce costs. In the future I’ll probably
Numbers
Purchase price
Closing costs
Holding Costs
Rehab
Cost to sell
Selling price of the house
Total expenses
Net profit
Payout to private lender
My measly leftover
57,000
1,200
1,523
31,787
11,200
140,000
102,710
37,290
7,458
29,610
This was a short blog I know but at the time of this writing I have a lot on my plate. I’m working on a new website to launch my photography hobby into a real(ish) business.
I’m working on a new 52 unit apartment deal
and to be honest this deal was so spread out it was just hard to keep my motivation. I didn’t do as much media as I wanted to do either as you can probably tell. I made decent money luckily and I’ll do another one as soon as some of my schedule clears up but more important than making a big social media push for this deal was
A. documenting my progress for future use and
B. leaving breadcrumbs for the next investor to see a whole picture of what I was able to do so they have a blueprint to work off. It may or may not be helpful for you, but I enjoy trying to help.
Thanks for reading,
on to the next project <3
One Response
Such a beautiful property with elegant interior design. Love this one.