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If you haven’t heard, Henry Washington and I are doing something special in honor of the 200th episode of On the Market. We are competing in a Flip/Off, battling against each other to see who can score the highest return.
We described our deals on the podcast and what we hoped to achieve, but I want to keep everyone up to speed on how my flip is progressing. So, every week, I’ll update this diary so you can see how my property transforms into the high-cash-flow deal I know it will become.
Be sure to listen to the Flip/Off episode of On the Market and leave me your comments below about what you think I’m doing right—and wrong—in my house flipping victory.
Week 1 in Review
We started our project on a TEAR. When purchasing flip properties, often times investors utilize hard money construction loans that have expensive interests. Interest expense on flip properties can erode profit and turn good deal into a average or even a bad one.
Ways that we prevented having a project drag out was having the property fully bid out with a contractor prior to closing. After reviewing the estimate, to reduce costs, we directly subcontracted for:
- Electrical panel and mast
- Furnace install
- Appliances
This saved us about $3,100 in costs.
Permits for new electrical we pulled the day we closed which allowed us to install the new electrical panel, have it signed off, and get going with the rest of our project with power. Proper preparation for this project allowed us to hit the ground running and gain some serious ground on the schedule.
What was accomplished this week:
- Demo – On Budget
- New windows installed – On Budget
- Framing new bathroom complete, we made some revisions to open the kitchen wall up by an additional 2 feet.
- New electrical panel installed and signed off on – On Budget
- Installed new mast and meter base – On Budget
Unexpected issue:
Water meter was SPINNNNNNNNING like crazy, cut off water at the street and checking to see if there is a small water line leak, hiring a locate company to trace the spots – Price TBD
Plan for next week – getting the project roughed in:
- Furnace to be installed
- Plumbing rough in will begin
- Electrical rough in will begin
- Spec selection for finishes for property
We are in a race to catch Henry’s deal. Naturally, with Henry’s price point, they can often yield higher cash on cash returns. If I want to be competitive and win this FLIPOFF, we will need to stay in budget and attempt to try and reduce our timelines down by one month. RACE IS ON! I am feeling confident in my team and the JUMP we got on the schedule.
Whose House Flip Can Pull In the Biggest Return?
A house flipping competition like never before! Henry and James detail two recent flips they’re working on and battle against each other to see who can score the highest return. Which property will win the Flip/Off?
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
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