Choosing to Turn Down a House Flipping Deal

The floor here is sunk about 6 inches.

I had high hopes that this post was going to be about announcing House #11 but unfortunately this will not be it. However, that is sort of a good thing...

After the sale of House #10 I have been looking for my next investment and sending out offers like crazy!

I had already commented on how much the inventory of foreclosed/bank owned properties had gone down in Atlanta. So a lot of the properties I am finding in my area of interest that would make good candidates are being bought by people willing to pay a lot more than I am.

So...back on Wednesday we finally put a house under contract. This house had gone under contract about four times before. Bank was asking $130,000, I was offering $95,000. 

How to Overcome Your Fear of Risk

Several years ago I realized that achieving the wealth and life potential that is beyond what I had at that moment was going to require that I push the boundaries of what I knew, had or was doing. This meant that I would have to face risk and fear to embark on a path that I had never traveled. I learned that overcoming the fear of risk was going to be crucial if I wanted to move forward.

If you have ever been or currently are in a similar place you need to realize that there will be no change unless you cause things to change.

A new path might look very risky if you are looking at it from the perspective of a stable, predictable and common life.

But when you decide to break from the mold, when you decide to become whatever it is that you want to become that does not match what you currently are, then you will have to overcome the resistance to pursue that life that you want to achieve. This is when overcoming fear comes into play…

Finding the Next Investment and 2012 Goals

Since the last house flipping project is now closed and in the books it's time to move on to next item on the goals list. I have been evaluating my goals for 2012 to see what is still left to be done and what's in store for 2013.

You might have noticed I have not been very active on the blog or on the site but that is because I am focusing on other goals and some work on the site instead of in the site. Not to mention dealing with several issues with my rental properties.

First off, with the sale of House #10 I have now achieved my two main goals for 2012. These goals were to flip two properties with an average $30k profit and to achieve a certain amount of income for the year. I am happy to say that we have done so two months before the year is over. Which only makes me wonder if I set my goal too low…

House #10 Final Financial Analysis...it's a good one!

Like I had mentioned in my last post House #10 is now sold. Here is the financial analysis so you can see how the numbers on this house flipping deal came together. This is a breakdown of all my costs and the profit from the sale as well as some performance numbers so you can see my returns on this investment.

I divide my analysis into 5 sections, the first four are all my cost categories and the last one is performance. The column on the right labeled "% of ARV" means what percentage of the after repair value (ARV) is attributed to each category. 

For example, the most important of the ARV numbers is the first one. It tells me that I bought this house for 53% of what I ended selling it for. This is important because for future purchases I know I should be buying properties around 50% of what I expect to sell them for.

Here are the actual numbers:

Celebrating a Milestone: House #10 is SOLD!

House #10 is sold as of last Friday and I wanted to celebrate with you where I am today. No, this is not about House #10 and how much money we made with this house flip, I will cover that in another post. This post on House #10 is more about having done, ten times over, something I did not think I could do. 

It's really about making significant progress in conquering fear, uncertainty and doubt - ten times over.

How I Avoided a Landlording Nightmare

I own two rental properties and for the most part I have good tenants. Of course every now and then something breaks or a rent check is late. Well, over the last two months a lot has broken and one tenant has been way late. Dealing with all at the same time has been challenging but I had a few things on my side. 

 Of the 5 years I have been a landlord it seems that this summer Murphy moved into the rentals and all of a sudden all the problems decided to show up in about an 8 week period.

First off both air conditioners in both houses broke. In one house the repair was just changing a capacitor in the furnace and cleaning the outside unit…$200. On the other house however, it was not so simple…

The fan in the condenser that sits outside the house broke off and since the unit was original to the house we could not find a replacement. So the option was to try and "invent" something or replace the entire unit.

House #10 Update and Rehab Budget Recap

The rehab on House #10 is complete and the house went on the market at the end of September. I am very happy to announce that we got an offer on it 72 hours after we put it on the market. Although it was not a full price offer like we got back on House #9 after a short round of counter offers we got to a price we could both live with and now the house is under contract!!

Probably the one thing that I liked about the offer more than anything was the fact that the buyer was using a conventional loan and they were already pre-qualified which is not the same as pre-approved.

So what? You might ask…

House #10 Repair Budget

Our latest house flipping project, House #10 is now completed and is on the market for sale. Here is the list of repairs that I am making to the house and the estimated repair for each. 

Cost estimating and putting together a budget is a critical skill to learn for flipping houses. I have known investors to go upside down on a deal because of underestimating repairs needed.

You will see that I divide the list into exterior and interior and then sort the interior repairs by room. This helps me put together the list of parts I got to buy and also helps me track the work to make sure it gets done. 

Flipping House #10: The "After" Pictures

Our house flipping project #10 is fully rehabbed and on the market!!

I will tell you that I think I set a new record with this one in terms of how easy and smooth it all went. I believe we got this one done right at three weeks. I have to credit the general contractor I used for doing outstanding work ( and me for hiring him ;-) ). Not only was the work done very well but my "management" (aka control) was seldom needed.

This made for an awesome finished product and a bit more sleep for me at night. I am so proud how this house turned out. You can look at the before pictures to see the dramatic difference.

Allow me to walk you through the improvements...

Before

Cleared out a lot of brush. Fresh paint on shutters, windows
and trim. Trimmed bushes up front and fresh pinestraw all around.

House Flip #9: Final Financial Analysis

House #9, our latest house flip project is now sold! 

Although there is no such thing as an easy house flipping project (those only happen on TV) this one made me loose quite a bit of sleep. Between the disagreements with the contractors that worked on the job and the running around to get the work done on nights and weekends while still keeping my daytime job, this flip was a challenge.

However as you will see, I think it paid off:  

Real Estate Investing Blogs You Should Read

I am a believer in learning from others that are doing what I want to do. Fortunately there are a few investors out there that chronicle their real estate investing adventures on the net. I have learned a great deal from many of these real estate investing blogs and I have even got to know some of these bloggers personally. 

When I was starting out one of the frustrating things for me was learning about real estate investing from some speaker that was trying to sell me a course or “seminar”. Although those courses could teach me something, some of these blogs have taught me more…for free.

By following these blogs I have seen how deals get put together from beginning to end. This is very helpful in allowing you to see how you can do it too. That is one of the reasons I was inspired to start my own site and blog.

Here are some of the real estate investing blogs I read and that I recommend you do too. One of the neat things about these is that you will see different styles, business models, markets, and techniques to invest in real estate:

Selling House #9 - Dealing With Inspection and Appraisals

It has been a while since I have posted on the status of House #9. The house is under contract and we are very close to selling it but we have had delays due to problems with the appraisal.  

In the last update I posted for this house I had mentioned that due to the buyer using an FHA loan and I having owned the house for less than 90 days, two appraisal would be required. I knew that was coming. 

First off, the buyer did his inspection and no major items came out of it. That always makes me happy because it means we did a good job with repairs during the rehab period. The only repairs the buyer requested were minor: adjust the patio door, fix a leaking (loose) shower head, fix the latch for the attic door, add smoke detectors and minor adjustments elsewhere. 

House #10 Before Pictures

Here is what House #10 currently looks like. We have already started work trying to change that. I think overall the house is in good shape. It has a water problem in the basement which is pretty common here in Georgia for a close to 30 year old house. 

What I really like about the house is the location and the neighborhood. The neighbors houses are very well maintained and this one stood out like a sore thumb but we will take care of that...

I really like the brick front. We will be painting the windows and getting
rid of all the overgrown vegetation. The exterior does not require
too much work other than some siding and trim repairs all around.

6 Reasons Why Starting A Side Business Can Change Your Life

Starting a side business is one of the smartest things I have done in my life. I call myself an entrepreneur but I still chuckle when I say that because that is not something I could have imagined calling myself 5 years ago.

Once I left the military I joined Corporate America only to face its harsh reality and find myself laid off soon after. With no clue where my next check was going to come from and lining up at job fairs with 5,000 others looking for the same thing I realized I had to do something different.

That experience was all I needed to figure out that I could not rely a 100% on a J-O-B for my financial well being. It was at that time that I started my full-fledged real estate business and this website.

House #9 "After" Pictures

The rehab on House #9 is complete and since my last update it is under contract and we expect to have it sold by the end of August (knock on wood). As you will see from the pictures we did not leave anything untouched with this house and pretty much either replaced or upgraded everything. 

Take a look at all the before pictures so you can see the dramatic difference. 

New roof, new paint, new garage door, all new windows and
fresh landscaping. 

Flipping Houses and The FHA 90 Day Rule

I had mentioned last week that as soon as we put House #9 on the market we got two offers on it. So we quickly went under contract with that house unfortunately that was short lived. You see, since I have owned this house for less than 90 days and the buyer wants to use an FHA loan to purchase it, things get a bit more complicated with the loan approval…

HUD has this “90 day rule” where properties that have been owned less than 90 days AND are being sold for more than 20% of the price they were last purchased for have to “jump through more hoops” to qualify for a loan. I already knew about this limitation but many times the buyer, their agent and their lender do not know about this rule.

House #9: Done, On the Market and...Under Contract!

This post was supposed to be to let you know that we were done with all the work on House #9 and the house was on the market. I was just not expecting to also be announcing that the house is under contract!

That's right, within 24 hours of listing we had two offers. But first let me  backup a bit and go over what it took to get this house on the market... 

Is it All Worth It? Finding the Motivation to Push Through

There is a lot going on for me right now and it's been more challenging than usual trying to juggle all my responsibilities. It is at times like this where my motivation wanes and I stop and question if what I am doing is worth it.

I have been finishing the rehab for House #9 (and the difficulties that came with it) and getting that house ready to go on the market. I have also managed to find and purchase House #10 and to top it all off we are in negotiations for what could soon be House #11. 

I can only do this part time because my day job comes first during normal business hours. So really my wife handles a lot of this and I help her with what she can't. But that still leaves plenty of work for me on nights and weekends. She is truly a champ because after all her first responsibility is to be the great mom that she is to our children. So being able to handle both as well as she does is admirable. 

Wealth vs. Financial Independence (part 3)

In this three part series I have been discussing the factors that you need to consider when trying to figure out what financial independence is for you. In the first part I asked you to figure out how much income you need to live the life you want. In the second part you needed to choose what strategy is going to help you get there. 

In this part I am going to ask that you figure out what is your number...what net worth you need to achieve to reach financial independence...

House #9: Flipping Houses and Dealing With Contractors

The rehab on House #9 is coming along slowly but surely. Unfortunately the emphasis on that is on S-L-O-W-L-Y. There really hasn’t been any major problems to cause a delay…no repair surprises, materials delay, bad weather, budget problems…none of that. It just turns out to be one of those contractor-just-does-not-show-up-to-work cases!

This is unfortunate and a bit embarrassing to report here because you would think that by this point I should know better. No, they haven’t been perfect in the past and I don’t expect them to be but without a doubt they have dropped the ball on this one. What’s more troubling is their continued lack of regard for our contractually agreed upon schedule.

Tools for the Cash Strapped Entrepreneur (part 2)

Evernote for the Real Estate Investor

In the first part of this article I talked about using the awesome Sugarsync to store and synchronize your files between all your computers and mobile devices. The other tool I use that is incredibly useful and powerful is Evernote.

Sugarsync is great for files but Evernote is amazing for all kinds of information storage not just files. If you don’t know about it yet Evernote is an application that allows you to create, store, share and organize notes.

So what's so great about that?…you might ask.

What makes Evernote so fantastic IMO is that it lets you store any kind of note. It could be a text note, a voice note that you record on your mobile device, a picture of anything that you take along with notes, a sketch drawn with their sketch utility and more.

The Difference Between Wealth and Financial Independence (Part 2)

In the first part of this article I wanted you to think of how much money you need to live the life you want. So you should have by now an idea of the lifestyle that you want and the money you need to achieve that lifestyle without having to go to work every day for it. 

You are now creating a vision...and end goal...a picture of how you want your life to be. Next step then is to set the wheels in motion now. 

The Critical Difference Between Wealth And Financial Independence (Part 1)

This article first appeared in our newsletter, Wealth Building Insights. You can have first access to this and more if you subscribe to our newsletter using the sign up form on the right >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Wealth and financial independence…are they the same thing or not?

You see these two terms frequently used together or interchangeably but I am of the opinion that they are not the same. Although they are related, financial independence has to do with money…having enough of it, making sure it lasts and does not run out, using it wisely and keeping track of it.

When you are financially independent the income you receive from your savings, investments, pensions, retirement funds, etc. is more than your expenses. Basically you don’t have to go out there and work for money. You can work if you want to but you don’t have to…a big difference.

OMG!...Did We Just Find House #10?

This business never stops surprising me. Earlier this year I commented (a lot) on how hard it had been to get a property under contract. There was a lot of competition in my area for the type of house that I was looking for and the banks were not even considering my offers. That has recently changed...

First off was House #9 which we ended up buying in May for a lot less than what we had offered the first time three months earlier. Then there was this property which we had made an offer back in February only to get a ridiculous counteroffer from the bank. 

Of course, we did not accept that counteroffer and moved on and the bank accepted someone else's offer. Then two weeks ago I noticed the house came back on the market so we made a lower offer than the first one. 

House #9: Planning, Budget and Demo!

The work on House #9 is on it's way. Basically I have spent the last three weeks planning...yes, a whole three weeks. This is due to a number of reasons. 

First, because rehabbing a house while holding a full time job is no picnic. My work takes the first 40+ hours of my week so I have to do this over lunch/nights/weekends. 

Second, since the house needs a lot of work this means that I am going to need a lot of different trades...this one is not a paint and carpet job. So that is a lot of different people that I have to call and wait on for estimates.

So to give you a quick summary here are the steps I have been taking and the order in which I took them:

Tools for the Cash Strapped Entrepreneur

Since I am a home-based entrepreneur and thrifty by nature I always look for tools that will help me in my business that are free or very low cost. The reality is that in order to start your home based business nowadays you can get a lot done with very little and often for a lot less than what you think. 

To start off, have you ever used more than one computer to do your work, say a computer at home and another at work? 

Or maybe you have a desktop and a laptop... Or you wish you could access a specific document on your smartphone while you are away from your computer. If you need any kind of access to your documents in more than one computer then you must try either Sugar Sync or Dropbox. After trying them both I prefer and highly recommend Sugar Sync. 

House #9 "Before" Pictures...

House #9 is ours and now we have to deal with it. Some pictures for you of our most recent mess :-). This one packs a punch, for a small house (about 1,500sft) it has quite the laundry list of repairs to do!

On my initial estimate I am coming up with a $33,000 repair budget. Some quick math will tell you that is $22 per square foot. For comparisons sake, House #8 was $21/sft. and it was a larger house with a lot of work needed. I will go into budget details in another post.

Look at the pictures and see if you can figure out what repairs you will do vs. the ones that I am actually doing:

House #9 and "Flip Flopping" Banks!

This business is full of surprises...you might recall that my search for the next investment property had led me to get this house under contract. Well, after doing a thorough inspection and calculating the rehab costs I determined that the price I had the house under contract for was too high. So I decided to tell the bank that I needed to lower my offer price (by $10,000) instead of asking for repairs (which they wouldn't do anyway). 

I knew this basically meant that I would not get this house because they have had multiple offers on it and the house had been under contract with other buyers before.

Needless to say their reply was quick and swift...NO. The seller will not lower the price. We had multiple offers on this house and is sold AS IS, blah, blah, blah...

So I asked them to terminate the contract and return my $5,000 earnest money check. I did not hear a peep from them in 3 days (these people only work through email, argh!) and then they came back to me and said they would lower the price by $5k. My answer was no, it needed to be $10k lower. Another 3 days went by and all of a sudden I get an email saying Congratulations, the seller has agreed to your purchase price…what!!!

The Elusive House #9...

Lots of action this past week but not a whole lot of results...


Let's see... I had told you about the two houses I was getting very close to purchasing over the last month. One house was going to be a rental the other one I was debating whether to rehab and resell it or keep it as a rental. 

On the rental house I spent quite a bit of time really crunching the numbers to see if it would make a goo investment which is after all the purpose of it all. In order to do this I try to project the expenses that I will incur as the owner. These include:

• Vacancy - I assume that in between tenants I will loose one month of rent per year for 10 years. This works out to be 8.3% of total annual income. 
• Maintenance and Repairs - I assume $1,000 per year. 
• Taxes and Insurance
• Mortgage payment - I plan to buy this with a 30 year fixed mortgage at about 5% interest rate, that requires 20% down payment
• Administrative costs - $250 per year
• Property Management - this is an important one that I missed at the beginning and my friend J Scott from 123Flip reminded me about. Although I don't intend to hire a PM there is a reasonable probability that I might in the future, especially if my rental portofolio increases so I might as well consider it. This comes to 10% of annual property income.
• Capital Improvements - yes the house has been recently rehabbed but still it is an old house and there were items that were not new. So over the next 5-10 years I would have to spend money to fix/replace some of these items like windows, plumbing, electrical, doors, fixtures, drainage, HVAC, etc.

Financial Literacy Problem or Personal Responsibility Problem?

Ok so I read this article on USA Today about how this gal is soooo lost about her finances and doesn't know where to start, blah, blah, blah... and my first thought is... what!!

Why doesn't she use the ipad she is holding in her hand to navigate to one of the 10 million websites out there that go into endless detail about your money, personal finance, investing, budgeting, etc. 

There has never been more information available on how to handle your money, grow it and keep it than there is now. I mean, if you have internet access you can learn ANYTHING you want/need to be able to handle your finances. 

Do I Flip This House or Do I Rent It?

In the last post I mentioned that after many offers I have gotten two of them in the final negotiations stage. In that post I went over the one house that I am considering keeping as a rental. The other house I have under contract has a 50/50 chance of being a rental or I could fix it up and try to resell it...otherwise known as flipping.

 In order to make this decision I need to consider several things:

Have I Found My Next Real Estate Investment?

Just thought I give you a quick update on what is going on with the investing activity since the last update. Well, the entire month of March was spent making offers on both a property to buy and hold as a rental and also looking for a property to rehab and sell. 

One thing I have learned is that the business of real estate investing is very challenging in the sense that there is rarely a steady flow of work. At times it seems like a "all or none" type of situation. Either you have a deal(s) that is going to make you money in the near future or you don't. 

So a big part of making a living and/or making progress towards achieving your financial goals in this arena is to always be doing something to get that next deal into your pipeline. Whether it is making offers, looking for motivated buyers, staying in touch with your wholesalers/agents/network or any other source that can bring you in a deal. You always need to be working on that next deal, even when you have one in hand...

Flipping Houses in Atlanta - Major Rehabs (3/3)

These series on flipping houses in Atlanta is about the different types of rehabbing and flipping opportunities you can find in this great city. In the first post I talked about the suburban areas located outside the Perimeter. The second part was about the opportunities within the City.

I did not go into the details of flipping in the suburbs because I have tons of that in the Flip That House page. In this post I wanted to go over a full rehab project in the City.

In the previous post I talked about Aaron McGinnis** and the rehab projects he does in the city. So for this post I wanted to go into detail on one of his projects.

Recently he bought this property for $74k in the East Lake part of town: 

Flipping Houses in Atlanta - Flipping in the City (2/3)

In the first part of this series  I talked about the predictability and uniformity that you find in the suburban areas of Atlanta or outside of the Perimeter. On this post I will show you the difference when investing in properties located mostly “In Town” or inside the Perimeter and it is one interesting way of making a living…

I say this because it requires you to be in tune with what is going on. Single family homes in this area are grouped into neighborhoods instead of subdivisions like the previous category. This makes a big difference...

When dealing with neighborhoods you now have history (think Martin Luther King, etc.), culture, plenty of social interactions, accessibility options (you can walk to places) and many other issues that are unique to life within the city.

All of this and more make for a very diverse real estate market where you can have a $300k, 2,000sft. completely remodeled house sitting right next (and I mean right beside) to a $50k, 1,100sft. shack from 1962!
 
To better illustrate, these videos show you one such property. Aaron McGinnis* is an active investor and general contractor in Atlanta who has helped me rehab House #7 and House #8. He just bought this property and is getting ready to tear it down and start all over again:

Flipping Houses in Atlanta (1/3)

Atlanta Real Estate Investing

Flipping houses in Atlanta can be a very diverse business, just like the city itself. In the years that I have been investing in real estate and flipping houses myself I have gotten to know and see the work of different "flippers". This has given me the opportunity to learn about the different markets within this city.

The cool thing about this is that I have learned that in this city you can make money in real estate in 100 different ways...

Atlanta is a city of 5 million and although Atlanta, the City, is a definite area inside of what we locals call "The Perimeter" (the area inside I-285 loop), the Atlanta metro area consists of 13 counties! Bottom line is, it's a huge city which is why there are so many micro-markets within it.

February 2012 Update - Looking For The Next Real Estate Investment

The new year is well upon me and the plans have been made and goals have been set. First and foremost I started the year just right because we managed to get House #8 under contract and we just closed on the sale last week…yipeee! I will have all the juicy details on what it took to get that house sold and all the financials on it very soon, really ;-)

For 2012 I am shifting my focus from flipping properties to acquiring 1 or 2 good properties that I can hold as rentals. I still plan to flip at least 1 or 2 houses but the main goal right now is to find me a rental house. With that being said the last two months I have been looking for the next property and submitting a lot of offers.

Right now I have looked or should I say evaluated about 50 houses and submitted about 30 offers year to date. To some real estate investors that might not sound like much and to others it might sound like a lot. But considering a full time job, other projects including this website and of course the all-important family-life balance this has been pretty challenging for me.

How Much Energy And Life Are You Trading For Money?

Everyone has to meet their basic needs... a roof to sleep in, food in the table, bills to pay. As your life progresses you somehow fall into the line of thinking that you got to work to make money. However, the more you work the more money you will make and therefore the more "stuff" you can have…

After all,  you work so hard, you deserve it…

Have you stopped to think at what point you will have "enough" and when can you stop working for money?

We are always looking for the promotion, for a job that pays more, for another job in addition to the one you have, and for ways to make more money.

In this process it is easy to fall into a life of work. Where the great majority of your time is spent working for money or in the preparation to work for money or recovering from all the time you spent working for money. So that your work then becomes your life…

Flipping House #8: The "After" Pictures

So here is the final result of our rehab on House #8. If you haven't already, it is crucial that you go and look at the before picture on House #8 so you can get an idea of the massive amount of work we put into this house. I have included here some before/after shots where you can see the major areas of improvement. 

Overall this was a moderately difficult project. There was all the standard stuff - paint, carpet, cabinetry, roof, flooring, etc. - but there were some areas that resulted in more work and expense than initially planned. 

The whole rehab took about 5 weeks and used 15 different contractors with one project manager (not me) in charge of the whole thing and then me overseeing about 2-3 contractors and then putting in the finishing touches the last week, right before putting it on the market. 

Let the pictures of this house flip speak for themselves (click on pictures to make super huge):

Before...duh!

Where to start...new roof, new paint, removed half the shrubs in the front and trimmed way down the rest,  then added new sod where bushes were removed. 

House #8: Fix and Flip “Before” Pictures

This is long overdue but here are the "before" pictures on House #8, our newest fix and flip project. As I had mentioned in  the previous post  this house is in a new area for us and is bigger, nicer and higher price range than what we have done before. 

I'll walk you through the pictures so you can see some of the major repairs and upgrades that we planned for it.

First thing I noticed is the wonderful curb appeal this house will have once we fix the roof and get rid of the blue tarp of course and remove some of the overgrown bushes that don't let you see the house.

Taking Control of Your Money

How does your money relate to your happiness?

You and I can probably agree that money cannot buy happiness. It’s a common expression and you have probably seen a case or two of someone with a lot of money that was miserable or even took their own life.

Yet our actions with money throughout our life suggest that the more money we have the more we spend in the subconscious effort to “buy happiness”. Think about it…

When you are feeling down you “treat” yourself to something to make you feel better…Whether it’s a new pair of shoes, a movie ticket, a drink, a nice dinner, an ice cream cone, etc.

When you want to celebrate good fortune you probably spend money in some way…A nice dinner, a gift from the mall, a vacation, weekend getaway, a catered party, etc.

When you are looking to do something fun or are bored you spend money again…Go shopping, the movies, buy something online, the casino, a sporting event, go to some big box store to buy something on credit, etc.

Life After College Roadmap

For those of you out there that are visual persons, I thought you would find this image useful. Also, if you have someone in college or a recent graduate you care about you might want to share this with them.

As you can imagine the road to travel after graduation is not always clear cut. Although this sketch oversimplifies the many crucial decisions that hang on the balance at this point in life, I still think at the least is a good starting point to get you thinking.

Tips To Control Impulse Spending

Do you have a problem with impulse spending? If you don’t know how to answer this question then look at your latest credit card statement. Can you pay it off in full?...

If the answer is no then you might have a problem with impulse spending. Also, I want you to think and give yourself an honest answer to the following questions:

Do you go to Walmart or Target to grab “one quick little thing” and come out with more than you went in for…lots more?

Do you buy things just because they were on sale even though you really did not need them?

Rehabbing House #8: The Budget

Like I had mentioned in previous posts, House #8 was not only going to require a lot of work but it was going to be more expensive work and more extensive too.

Putting together a detailed budget proved to be a challenge because the repairs were very diverse and because of the size and price range of the property they were also harder for me to estimate.

For example, although I have replaced roofs before and have pricing figures from previous roof work, the roof on this house was huge and steep which adds to the overall difficulty of the job. So while in the past I had roofed houses for $3,000 to $4,000 this one was going to be $6,000+.

What Kind of Results Are You Getting?

I was talking with someone recently and somehow we ended up talking about real estate. When I told them that I have been buying, rehabbing and selling real estate (otherwise known as flipping) over the last couple of years, he gave me the “deer in the headlights” look.

He stopped for a brief second as to see if I was joking…

Then he asked, “like they do in those TV shows?…”

To which I replied that in principle it’s the same thing except nowhere near as easy or as dramatic as they make it look on TV.

Then he said in disbelief, “that is completely the opposite of what you see and hear in the news…”

Exactly!