Hey there folks! I thought for this post I’d take us back in time to 2018 to mine and Todd’s second flip (my 7th) and share the numbers!! (Which I’m still shocked I never did!)
In this post I’ll address a common question I’m sure a lot of people have, but not as many are brave enough to ask – what were our numbers on this flip project? What’d we buy it for, what was our budget, what did we sell for and the bottom line of course, what was our profit?!?!
There are people out there who think that asking what someone makes on a flip is kind of like asking what their salary is and some people HATE talking about salary.
Lucky for you an important part of this blog is sharing our real estate investing journey, which I think includes sharing the numbers. Why? Mainly because I like teaching and sharing with people and what better way than through sharing our own projects?! (I also get giddy with excitement when I find a flipping blog that details the numbers and want to provide that excitement for someone else… and what can I say, I’m a numbers girl.)
While I love allllll the shows about flipping houses, I find myself screaming at the TV for not showing the whole story. Rarely do they show accurate numbers (reflecting holding costs, agent fees, etc.) and I feel like they make it appear like it’s as easy as 1-2-3. Buy a house, fix it up and sell it, when really it’s not.
What’d we buy this flip house for?
We won the house on an online auction site, xome.com and bought it for $190,000. But, and this is a big but (I like big buts and I cannot lie…) the auction site has a buyers premium of 5% which brought the total to $199,500. There was also transfer tax of 1%, title insurance fees, closing fees (like document prep, notary, etc.) and junk fees I don’t even wanna talk about because they make my blood boil.
So the total purchase price wound up being just about $205,000.
What’s was our budget for this flip house?
Our original budget for labor and material for this flip house was about $35,000…
And I bet you’re expecting me to say we blew the budget but we actually came in at only $31,000! And that $31k INCLUDES all of our holding costs for the 4 months we held it.
This flip was mostly a cosmetic flip and the biggest projects that took up most of the budget were refinishing the kitchen cabinets, installing new counters and backsplash, all new engineered hardwoods throughout and light remodels in the bathrooms.
In the bathrooms, we were able to re-purpose the vanities by painting them white and having granite counters installed. We also repurposed the light fixtures by painting them to match the new black hardware and fixtures we installed. We also laid a beautiful new tile in both bathrooms and in the master bathroom we also had a matching granite installed around the jacuzzi tub to make it more luxurious.
The whole house got new paint from top to bottom and we installed crown molding in the living room, dining room and entryway to add a sense of grandeur.
Where we were able to save some money was being able to clean the carpets in the basement, fix a few windows instead of replace them and we were able to save the back deck by replacing a few boards and painting it!
What was the profit on this flip house?
And now for the burning and most important question… what was the profit on this flip?!?
So let’s recap. We bought the house for a total of $205,000. We put $31,000 into it which includes all of material, labor and holding costs (ya know, taxes, insurances, utilities, etc.) We also had to pay closing costs of about $8,250 – which included a buyer’s realtor commission, transfer taxes and a few fees to close.
After all these fees our profit margin was brought down to $57,750 and while that’s a sweet looking profit it wasn’t all ours to keep. We had to split the profit 50/50 with our investor!
So in the end we made a profit of $28,875.
But then don’t forget we also got taxed on that profit when tax time rolled around and since we held it for less than a year we had to pay short term capital gains – which ate into our profit even more.
While I love flipping I’m definitely more of a buy and hold real estate type of gal but it’s nice to get an influx of capital every once in a while.
If you want to see all the before and after photos – check out this album over on my Facebook page!
Subscribe
Be sure to reach out on Instagram, Facebook and Pinterest and subscribe to this blog to be notified when new blog posts are up – who would want to miss those!?! (And if you’re a fellow blogger submit your website! I love finding new blogs to read, pin and share!!! It’s so hard to find a good quality blog nowadays, you know what I’m saying?)
[contact-form-7 id=”3255″ title=”Contact form 1″]
