This is a Grand-Rapids Experience of an actual case of Flipping Successfully!
Grand-Rapids Estate Property Flipped!
Flipping a Non Foreclosure in Grand-Rapids MI
In these days of Real Estate Agents who particularly look for properties for investors they have on file, it can be the rare instance that you can buy a Non Foreclosure right out of the local real estate market and a price that can make you a profit in the very near future! Flipping at it's best!
Here is Flip that happened to me:
While out and about in the Northwest section of Grand-Rapids Michigan, I spotted a new Real Estate For Sale Sign in the front yard of an older two story home. Calling on the home immediately from my cell phone I was told that the list price was $39,900 and that the listing agent was showing it to a client about 11 A.M. that same morning. This home was apparently being sold by the elderly owner who was moving into an assisted care facility and wanted to “move” the house.
I arranged to be there at 11 AM and went through while the Agent was showing his client the home. With the comments I heard, it was a “done deal” in that the client was going to put in an offer on the home. I looked through the home and because of my previous research; I knew that most 3 Bedroom, One Bath homes in this area sold for about $69-79000. I immediately went home and had an offer written up. I thought, “Hey, might as well give it a shot!”, and offered $39,000, CASH. I was able to do so because I had a home equity line of credit that allowed me access at any time to those funds. The Agent’s client also put in an offer, but it was contingent on them finding someone to invest in a land contract to finance it for the agent’s client. This meant that the owner would pay down “points” for the privilege of this financing and thus a lower net to the owner.
Thus, my offer was accepted and we proceeded towards closing. I paid for and had an inspection done on the home and found that the roof was fine, but needed some repairs in the valleys, the exterior needed new paint and storm windows, and the interior needed updating badly. Fortunately the kitchen had been updated in the past 15-20 years and so had the bathroom. (NOTE what I said on another page about these two rooms?)
So we closed on this property. I proceeded to get to work. The kitchen needed new flooring, so we put down new vinyl. The rest of the rooms needed new carpet. One of the upstairs bedrooms needed a heat source (in order for FHA to count it as a bedroom) so I had an electrician fish up a new line and installed an electric radiant baseboard. The walls in the Dining room were horrendous and I spent a whole day skim coating them to make a smooth finish. Repaired other interior walls and repainted them. Found a beautiful 6 ft Pocket door that hadn’t been closed for 50 years, reworked, refinished and got that operational again.
On the outside I bought and installed 17 new storm windows, white to be specific, repaired the roof, and then painted the entire exterior with the assistance of some friends 18+yr olds who were out of school.
The Result was a home that from the Street looked GREAT! And when they got inside, it was all set to go!
We only worked on this home 2-3 days a week, but had it up for sale in 3 months. The result: We sold it to a first time home buyer for $69000 and after ALL of our expenses experienced a capital gains of about $16,000 and at the end of the year we paid no self employment tax on the gain.
Most investors in my locale want a 20K profit! Our goal was 10K, after all of the expenses. Remember that whatever I bought to work on this house, whether brushes, pans, or a 24 ft Fiberglas Ladder. All those expenses were Written off from the profits of this sale.
Remember too, that this was part time work!
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