I’d been looking for a good potential property for a month or so with little success, but things quickly got rolling last Friday, when both of the properties we looked at turned out to be pretty promising.
I was initially leaning towards the first one, which was listed at $79,500, as it was built in the 1930s and had a lot of nice features such as 12 foot ceilings, original trim on all the windows and doors, and had recently had the pier and beam foundation leveled, and was located on a really nice street. It was listed as a 2/2 and about 1,400 sq. ft., but there was an enclosed back porch that could fairly easily be turned into a third bedroom. It also had a nice fenced yard, including an extra lot on one side.
The major downside was that there was no central air and heat, and one of the “bathrooms” was simply a toilet stuck in the laundry room. The kitchen was also essentially a sink and counter, with no cabinets whatsoever (?), and the plumbing hadn’t appeared to have been updated at any recent point in time. It’d need at least $25,000-$30,000 in repairs, and it’d take at least 2-3 months to get it fixed up and ready to list. It’d probably sell for $130,00-$135,000 when renovated (and I probably could have gotten it for $74,000-$75,000), so there was definitely some upside as far as profits, but it would have taken longer to sell at that price, as we live in a smallish town where it simply takes longer to move houses in that price range, especially older ones.
The second one seemed a little dinky at first glance, but the backstory was a lot more compelling. The owners had done some work on it and listed it at $90,000, but quickly got discouraged and dropped it to $78,500, then pulled it completely when it didn’t sell. They apparently rented it month to month for awhile, decided they didn’t want to hassle with tenants, and were going to re-list it at $65,000, just to sell it and be done with it, as they needed the money. The listing agent works in the same office as our realtor, which is how we knew about it, despite the fact that it wasn’t listed on the MLS again, so we ended up offering $60,000 and they accepted today, without even bothering to counter.
As far as the house itself, it’s a 3-1, 1300 sq. ft. house built in 1935. It’s got hardwood floors in the living room and dining room and some nice built-in features. The owners were kind of schizophrenic about what they updated, as the exterior is painted and in great shape, but it’s got zero curb appeal as far as landscaping. They plunked a fairly nice brand new vanity in the bathroom but the shower surround over the tub is cheap plastic panels that are falling off the wall and look terrible. Almost all the switch plates are missing and the crown molding and trim (which is actually in pretty good shape) isn’t even nailed to the wall in some places.
It just needs a lot of cosmetic work, more than anything. I’ll probably refinish the hardwood floors in the bedrooms that are currently covered in cheap carpet, tile the bathroom, and replace the old acoustic ceiling tiles in the kitchen, but that’s pretty much it for the larger jobs. Everything else is simple boring stuff like painting throughout, repairing trimwork, landscaping, and other similar stuff.
The plan (assuming we close and actually buy the house, of course) would be to get all of the work done in a month and get it back on the market. I’m planning on budgeting $5,000 for repairs (which is high, and I’ll likely come in substantially under that but it seems smarter to overshoot), and hope to list it at $90,000, with the goal of getting at least $85,000 for it. Backing out all the myriad fees on both ends, that’d be a profit of $12,000-$15,000, which would be fine with me, as far as my first shot at this flipping thing.
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