Show125: What We’ve Learned With Flipping Houses

What We've Learned With Flipping Houses

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If you've followed our story for the last year or so you know that we started dabbling into doing complete renovations on properties with the intention to sell them.

As primarily long term rental investors, this was a new avenue that we were pursuing and wanted to do it in a effort to diversify our investing and be able to report to you what we learned in the process.

While we started down the renovation road with the purpose of selling the properties to make a small profit, we ultimately decided to keep the properties and turn them into long term rentals.

We learned a ton along the way in relationship to hiring and working with contractors as well as getting a better idea of what it costs to renovate properties from the bones up.

Meaning, we bought these properties and basically took them down to the studs fixing everything: electrical, plumbing, HVAC, structural elements and more.

How flipping houses showed us a new rental niche in our town.

 

When we finished our first renovation project we were excited to get it on the market.  It was completely updated with granite counters, stainless steel appliances, exposed brick fireplace in the kitchen, brand new bathrooms.

I mean everything was new.

And ultimately in our small town, where the market takes a couple years to sell properties, the property sat.

For about 10 months.

And we decided that instead of continuing to drop the price just to get it sold, since we didn't need the money back out of the property, we would keep it as a rental and earn approximately $10,000 for holding it as a rental.

Fast forward to the beginning of 2018 and we went after another property doing the same thing we did on our first project.

This time we let it on the market for only one month (definitely not long enough) but decided instead of rolling the dice and heading into fall/winter without a sale we would rent it so we had guaranteed income of another $10,000 (net profit) in our pockets.

 

In this episode, Kirk and I break down our flip projects sharing some of the numbers and why we specifically chose to turn these "flip" projects into long term rentals.  Ultimately, because we didn't have the pressure of liquidity we were able to make a sound decision as to what worked for us given our market.

 

In the show we discuss:
  • the renovations we did to the projects
  • what we learned about 'high end' properties in our town
  • the importance of not needing the liquidity in a property for decision making
  • what we plan to do with them in the future
  • and more...

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Links Mentioned in the Show

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