House #23 – It Pains Us To Do Another Flip
May 2015
House #23 29019 Ethernet Toasters
OK, guys, we were so happy after we got House #22 up and running, so we wanted to do it all over again. We got a call from one of our trusty wholesalers who had a contract he needed to re-assign stat! My business partner (the other half of The Stealthy Rich duo) whittled him down, and we got a screamin’ deal in the end. See, these wholesalers have to get these houses under contract with somebody else quickly, or they then look bad and face potential legal trouble as they have no actual intention of closing the property themselves. They have no cash or ability to do so.
Front of house
It was a three-bedroom, two-bath house built in 1976 with 1300 sqft, situated right in the heart of the “farm.” It was zoned to excellent schools in an older but great neighborhood. We love this area as it’s so much closer to The Stealthy Richs’ personal residences and in the better county for taxes and insurance. This location means fewer taxes and headaches for us for the few times we need to visit the property. However, most of the time, our systems allow us not to visit more than a few times throughout the whole process.
Deal and Financing
We got this one under contract for $80,000. This means the wholesaler probably got it for 72k or something close. Sweet deal for us. However, it needed some work, all new paint, new light fixtures, and in the end, part of the HVAC was bad (The coil). Below is a list of all the costs required to get this little factory up and running.
| Yard | 545 |
|---|---|
| Pictures | 108.25 |
| Toilets/Blinds/Light Fixtures | 401.88 |
| Utilities | 356.28 |
| HVAC | 2800 |
| Painter / Supplies | 1200 |
| Outlets /Electrical | 201.75 |
| Make Ready | 200 |
| Labor Fixtures/Blinds.etc. | 975.42 |
| Appliances - Range/Dishwasher | 388.72 |
| Appliances - Fridge | 900 |
| Buyer Requested Repairs | 1,730 |
| Termite Treatment | 600 |
| Total | 10,407.3 |
Here are some pics of this bad boy after we did the rehab. Unfortunately, we don’t have any before pics; imagine the worst and subtract five from that. 🙂
Flip House Pics
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Decisions Decisions, What Should We Do?
As we decide if we should rent this property or flip it, we are dumbfounded by the comps for this house in the neighborhood. Holy crap. We can sell this house for $120,000+. That’s about 20k profit after expenses, so we decide to list. If we had rented, we would get about 1225, which would have yielded about 225 a month in profit. That means we would need 7 years to make what we could make by flipping (not considering taxes, of course).
We quickly get an offer after listing and finally settle on $122,500 for a contract price. Here’s the closing HUD. I made some significant cash on this deal, on to the next one! Hopefully, we can keep it.
Net Worth Update
Moving ever close to the $1,000,000 mark!
