Well, we finally closed on Friday and now I can do the big reveal on our financial specifics. In case you missed the big reveal on the way everything looked, check it out. I'm super proud of our work. I shared our original projections back when we first bought the house. We were WAY OFF in a good way. As a re-cap: our projected profit was $13,099. That was a purposely conservative projection, which made us feel good about this investment. We figured that we would probably make more. We didn't anticipate how much more our profit would be! Here are the details: Purchase price:$ 155,000 Rehab costs$ 38,732 Holding costs:$ 5,017 Closing costs:$ 7,923 Realtor fees:$ 13,750 Sale price:$ 275,000 Profit:$ 54,578 Obviously, the biggest error in our projections was sale price. We had expected to sell for $235,000 and ended up selling it for $40,000 more than that. The market was on fire when we listed the property. John and I argued a bit about the listing price of the house. I was arguing for much lower (I'm embarrassed to say this, but I was saying $249,900 to get at those with a $250K max price). John, my realtor boyfriend/business partner, had done the comps and wanted to list ...
Flip #1: Before-After Photos
After 3 months of working on it, we put our first flipped house on the market in mid-March and went under contract shortly afterward. Closing is around the corner, but I'm superstitious so won't be sharing any of the financial details until the money is in the bank. But, stay tuned and keep your fingers crossed for us that the closing goes smoothly! In the meantime, I've finally gotten around to organizing the 100s of photos I have of our fist flip project. While John did the lion's share of the labor on this project, I made every single decision around finishes and look. There were definitely some hiccups (mental note: white penny tile + white grout = blech), but all-in-all I think it came together nicely. For all of you out there who thinks it sounds like fun to choose the finishes, it is...but it's also very stressful (especially when your boyfriend/business partner is impatient with how much time you are taking to look at tile!). It's one thing to choose a tile you like. It's a completely different story when you have to think through whether that tile will look good with the vanity you are choosing, and whether that vanity will ...
Flip #1 Update: Before Photos & Videos
You guys!!! I've been a terrible blogger. I'm so sorry. The flip project is nearly done and I haven't even posted before photos/videos. Well, get ready for an onslaught of information. But, first here is a little teaser before photo of the house: Before photo: our first flip A lot has happened since my last post. We started out by getting bid after bid from contractor after contractor. Originally we were going to hire a contractor and crew to get the lion's share of the rehab work done, but we quickly realized that reliable contractors are nearly impossible to come by, and those who are reliable charge extra for that reliability. So, John decided to move forward with the work himself. I'm lucky...not only do I have a partner who knows his s*!T when it comes to real estate, but he has also done a lot of the labor involved in rehabbing houses. Eventually, we found someone to help John out on a day-to-day basis, so that's been helpful. Now, it's time for the house details. It's a small 3 bedroom, 2 bath ranch home in the north/northwest suburbs of Chicago with a full basement. The main level is less than 900 ...
Our first flip begins
Well, yesterday was the big day. We closed on our first investment property together. The closing was relatively painless and only took about 45 minutes. We spent the rest of the day getting supplies, going to the house, and getting bids. Today John started demo. I took pictures and video and will post them soon. I read this article about how reality TV flipping shows don't give viewers the real details about the costs involved in flipping. They simply give the purchase price, rehab costs, and the sale price and use those numbers alone to calculate profit. These profits are artificially inflated because they do not take into account the substantial other costs that go into it including holding costs (utilities, insurance, interest, etc.), closing costs, and realtor fees (5-6% of the sale price). In our case, these three buckets add up to more than $20K. So, in an effort to be transparent, here are the financial details of our project: Purchase price:$155,000 Rehab budget$45,188 Holding costs:$4,238 Closing costs:$5,725 Realtor fees:$11,750 Sale price:$235,000 Profit:$13,099 The profit is a lot less than what we discussed our threshold should be, but after going through so many rejected offers we realized we would have to adjust our expectations. This is still a ...
We got a house!
Well, I guess 7th time is a charm for us. After 6 failed offers, we finally received notice that an offer was accepted. We put in a cash offer with a quick close (2 weeks). Tomorrow we have the inspection and will start getting quotes for different pieces of the work. I'll give more details about the place once it is officially ours, but needless to say these next two weeks will be action packed.
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