It’s that time of the year when blogging types increasingly gaze on their own navels, trying to make some sort of sense of the year that just passed, so color me guilty along with all the rest. I do think there’s a lot of value in setting goals and holding yourself accountable for progress (or lack thereof) towards them, so I suppose it’s not just silly vanity at work, pretending and inflating a string of 365 consecutive days that you experienced into some sort of measurable whole.
As far as house flipping/REI goes, I’d probably give myself a B on the year (but trending towards B-). The effort was there, as I rehabbed 3 houses during 2007 (our former primary residence in Austin plus House #1 and House #2), but the results so far are mixed. We made a good chunk of money on the Austin house but that was largely due to buying at a good time, and I can’t really count it as a flip proper.
House #1 is set to close next week, and I’ll make a bit of money on it, but I can’t help but feel it drags down the overall grade for the year. I’ll babble in more detail when it’s actually closed and I have hard, final numbers, but my inexperience hurt me here, as far as how to handle the situation when we bought House #1 and also decided almost immediately to sell the Austin house (as opposed to continuing to rent it).
I basically let House #1 sit empty and untouched for months, focusing on the Austin house instead. That was the right choice as far as focus, but I should have revisited my plans for House #1, either renting it as-is with a few necessary repairs or simply paid someone to do the rehab work. I got stubborn, saying that I bought it because I could do the majority of work myself, it was dumb to pay someone good money to do what I could, yada yada yada. In the end that cost me money, as by the time I rehabbed House #1 and got it on the market conditions had changed pretty dramatically as far as the lending environment.
I’m not sure what to think of House #2. I didn’t expect to have as hard a time finding a contractor and plumber, so it’s taking longer than I’d imagined to get it done and back on the market. On the other hand, I’ve been pretty spot-on as far as the budget goes, and I feel like I struck a good balance on what I’m spending money on and the impact it produces. This is the first major rehab I’ve tackled so I guess some floundering around is expected, as far as timelines and contractors and what-not. Like any investment, though, the real test is whether it’s a profitable one or not, and that’s obviously still very much up in the air.
I should probably give myself more credit for simply taking the leap into the world of real estate investing in the last year. I sat on the fence for a long time, muttering about doing it, but 2007 was when I actually put my money and labor where my mouth was, and gave it a shot. I didn’t make a boatload of money but I learned a lot, and it didn’t turn out to be a year that was conducive towards flippers anywhere making boatloads of money.
The biggest struggle wasn’t so much the work involved or all the inevitable hassles, but the simpler issue of balance. Which will likely be just as much a struggle in 2008. It was harder than I imagined balancing life, a day job, essentially a second day job (all the freelance and contracting work) with flipping houses piled on top. For most of the year I scurried around with the weight 981 other things that needed doing on my back, at any given moment, and at a certain point that gets pretty damn old, especially when you find yourself unable to simply sit down and veg out in front of the television.
I managed to juggle all that reasonably well, but it was hard. This spills over more into “Goals for 2008″ territory, but for my own sanity I need to get serious about focusing my efforts in the near future, even if it means sacrificing some short term stability (yeah, I’m talking about you, day job; consider yourself on notice).
All in all, not a bad year as far as my real estate schemings. Not a great year, but not a disaster either. I survived it and made a little bit of money, which I suppose is a success if you look at it as a business in its first year.
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