So much has happened this week I’m not sure how to tackle today’s post. I have before photos of two of the properties that are coming up to rehab and I have to write a LONG post on the 3-day mastermind I just attended. I think I will start with the house that we already purchased and then write another about the mastermind if there is time. Today may turn into a double feature blog post!
A few weeks ago, I wrote about the joint venture (JV) partnership I worked out with another investor to purchase houses at the foreclosure auction to renovate. We picked up our first house about two weeks ago and I was able to get into the house on Tuesday morning to take my FIRST look. That is the downside about buying at the foreclosure auction; you don’t typically get to see the inside of the houses before you buy them which drives up the risk factor. However, the risky areas are also where the most money can be made. Fortunately the side door was unlocked so we didn’t have to force our way in, the downside was that the kids that partied in it the week before didn’t have to either.
Since this is the first house I am renovating since starting up this blog, I will go into details about the house and scope of work. I will also follow along in depth with this one each week so all of you can see the process and the work involved in flipping a house. The rest of the projects this year will likely only get a before post with a small amount of scope and a final post with some numbers and the finished product. It would just be too much to try and follow along with every renovation project this year, especially when I exceed my goals of 12 houses.
This house was built in 2009 and is a 4 bedroom, 3 bathroom, 3000 sq ft brick home in a nice neighborhood of Pace, FL. The builder who built this community is just finishing up on the last few lots so there are still some new construction homes in the neighborhood. I think that will help us with the price point because this house will be finished a little better than those and at the same or slightly lower price. This will significantly decrease the time on market and should bring a few offers when first listed.
The purpose of these posts won’t be to teach you how to flip a house but to just go step by step through what I need to do in order to get this property completed. If you have any questions about why something was done or how to do it, just shoot me an email – firstname.lastname@example.org or leave a comment below the post. Step one after purchase was to get a vacancy/builders risk insurance policy to protect the investment. The utilities were also turned on and changed over into the name of the business. I had an idea of what would need to be done to this house but it was hard to really know until I could walk through it for the first time and see the condition. Here are some before photos so you can see what my contractor and I saw when we walked in. I’m not sure how to put a parental advisory tag on my blog post but one or two may be inappropriate for your kids if they are reading or looking over your shoulder. I found that out the hard way yesterday when I was looking at the photos for the first time with my younger cousins.
As you can see, someone was clearly partying in this house but overall it isn’t in too bad of a condition. There will need to be some drywall repair and at least a coat of primer or extra coat of paint to cover the beautiful artwork on the walls. The only other concern I would have about the house is the plumbing that will come across once the water is turned on. There is some minor wood rot around the trim of the exterior doors and some termite damage near the window by the kitchen sink. So, those items could drive the costs up slightly when we start digging a little deeper.
My contractor and I walked the house on Tuesday and I came up with the scope of work. This house was fairly easy as almost all the items were cosmetic repairs. The scope consists of cleaning out the house, demo flooring and countertops in kitchen and bathrooms, repair doors/trim/walls as needed, paint house, new hardwood in living areas, tile in kitchen and bathrooms, and carpet in bedrooms, re-spray the shower enclosures and tubs, refinish kitchen cabinets and add new hardware, granite counters, stainless appliances, can lights in the kitchen, wood rot and termite repair, and some exterior curb appeal work.
The contractor sent me his bid and we are currently discussing some options to get the price down to where I need it to be. This project should only take 4 weeks to complete and I’d like to have it on the market by March 1st at the latest because we have two more starting in late February.
That’s all I have for now, check back in a few hours for my next post about the incredible 3-day mastermind I attended this week. The title of it is 7 Figure Flipping so I’m sure you can figure out what the goal of that program is. It consisted of some very high level flipping and wholesaling investors all meeting to discuss how we can get our businesses to the next level while actually reducing the amount of time we spend on our businesses. If you read my previous post about mastermind groups, you will know how effective the laws of association can be and how picking the right people to associate with can really lift you and your business up to the next level faster! I can’t wait to write that one…