May was another very busy month for the fix and flipping business. I bought three new fix and flip properties, I got one new fix and flip purchase under contract and I sold two fix and flips. I have 8 fix and flips in my inventory and the biggest challenge is getting them all repaired and ready to sell. To see what happened last month, check out my fix and flip update for April here.
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New fix and flip purchases in May
The first fix and I bought was a home that is about 40 miles away from me in a small town of about 1,000 people. I have never bought a house in this town before, but the market is doing very well there (as it is everywhere in my area). The house was listed as a REO for $70,000 on the MLS. This was a very low listing price and the listing agent knew they would have multiple offers as soon as it was listed. I figured the home was worth at least $150,000 fixed up and I offered $93,712 with no contingencies. They accepted my offer and we closed the beginning of May. This is an older home, but the best feature is the over-sized 2 car garage with a workshop and 2nd story. I figure the home will need about $20,000 in repairs and I hope to have it done in the next 6 weeks. I am backlogged with my other properties so no work has begun yet.
The second fix and flip purchase was a Wells Fargo REO property listed in a town about 20 miles away from me. This town has about 15,000 people and a great market as well. The home was listed for $96,900 and they had multiple offers again. Here is a great article with more information on how to win a multiple offer situation. Even though this was a great price for this home, I never saw the inside of it before I made my offer. I went to look at the home, and the key in the lock box was gone, so I could only see in the windows. The MLS listed the home with an unfinished basement, and I made my offer based on the information and the condition of the exterior and what I could see of the interior.
A video can be seen here on the property. I could see the kitchen was decent and it had hardwood floors as well as new windows. The home would still need paint, a new roof, a clean up of the yard and many minor repairs. I offered $94,452 with no contingencies and to my surprise my offer was accepted! I thought someone else would pay much more for the home, but maybe the removal of my inspection made a difference. With an unfinished basement I figured this home would be worth at least $150,000, but when I got inside I found a bathroom and bedroom finished in the basement. I think it is now worth at least $160,000 after it is fixed up. Here is an article on how to determine market value.
The third fix and flip I purchased is a very interesting property! The home was built in 1875 and is one of the oldest properties in the area. The home was listed for $105,000 as a fair market sale. They had multiple offers once again and I offered $105,000 with no contingencies. They accepted my offer, however, the title work did not come back clean on this property, because the garage and septic system were on the neighbors land. We ended up ordering a survey and discovered the garage was allowed to stay as long as it was not torn down and the septic was on city land. I had assumed the garage would be torn down because that was disclosed in the MLS comments so it was a bonus that I got to keep it. This home is also on a busy street, but I factored that into my valuation. I feel it will be worth $165,000 after $20,000 in work. Here is a video of the property.
Fix and flips sold in May
In May I sold the fix and flip I did a case study on back in October of last year. A full write-up of the before article is here and the after article is here. I made almost $50,000 on that flip, even though we went way over my estimate on repairs and took way too long to sell the home.
The second flip that was sold was the last house left over from the fix and flip business when both my father and I were working together. This home was purchased for $82,000 and sold for $147,000 with about $15,000 of work done on the home.
New fix and flip under contract
The new fix and flip under contract was a short sale I had an offer on that was accepted by the seller back in February. The bank approved the sales price and we are set to close in the middle of June. The home was listed for $140,000 and it will be worth about $190,000 after $15,000 in work.
New contractors for our fix and flips
I have two new contractors working on our fix and flips and so far so good. I have stopped using one contractor completely and one of the new contractors has hired more crew to help with my growing list of properties. I am hoping the new contractors will shorten the holding time significantly. Here is a great article on how to find a contractor.
Future focus with fix and flips
Fix and flips have kept me very busy and I am focusing on getting my current inventory repaired and sold. I won’t pass up a great deal, but I am definitely not going to stretch my numbers for any new purchases.
For more information on flipping houses, including how I average over $30,000 profit on each flip, check out my bestselling book Fix and Flip Your Way to Financial Freedom on Amazon. It is available as a paperback or eBook.