How To Buy And Flip A House: A Case Study.

How To Flip A House From Start To Finsish

Want to know how to flip a house? What is the exact step by step procedure of flipping a house? Well, no 2 house flips are the same. But I will show you how we are flipping this one! With so many house flipping blogs out there, and with all these “How You flip houses” articles, I have yet to come across a really good one. And I get why, it is hard, and a lot of work doing it in a way that it is interesting helpful ad functional. I can not find an article that doesnt just talk about the flip, but the entire process. Finding the property, analyzing the property, figuring out the numbers, making an offer, signing the contract, closing, finding contractors and then, finally flip the house!

I would have found it invaluable if I had found such an article when I was starting to invest in real estate, so why not try to write one myself.

I will try hard to cut out all fluff and just go straight to the point. Also this will be more of a how this specific house is being flipped rather than a general how to.  After all, this is a diary blog on how we flip our houses.

 

How We Buy Houses In Connecticut

We buy houses in any condition, as is, from people that rather sell fast for cash than list with an agent. From my post on how to do SEO for real estate investing, it is clear how we get our leads so we always have houses to choose from. This was not an exception.

We Bought A House In Stafford Springs CT

Let’s start with a background. This house is in Stafford Springs Connecticut. It is a small house, barely 1000 square feet, sitting on 1 acre of land. It is pretty much in the middle of nowhere, yet close to the city center.

The Numbers:

  • Purchase price: $41K
  • Cost of Repairs: $48K
  • ARV: $160K-$170K
  • Estimated profits: $40K
  • Project Duration: 35 days

How We Bought This House:

Unlike many other flipping posts no one talks about how they actually found these deals. So let me share how WE do it.

1. Seller Finds Us Online

We have a real estate investing website with a ton of info on how we can buy houses without agents and thus without paying agent commissions. We focus both on credibility and ranking our motivated seller website high, both needed to have sellers fill in our forms letting us know that they want us to buy their property. The seller found us on Google. They filled in the form and we started doing a bit of research.

This is a crucial part of our success. We get leads continuously, and not just any “leads”.. No! We get the highest quality of leads. Leads that took the effort to find us (vs. us finding them). These leads are serious and they need to sell fast. To get sch leads we are constantly expanding our website to target new cities all over Connecticut. Some of the new pages we created target buying houses in Berlin CT. he day before we made a house buying website for Avon Connecticut, and so on.

 

2. We Do Our Due Diligence

I sent my agent this information and she started working on the comps. In the meantime we started looking for contractors to give us bids. Our previous contractor stole from us so we had to find a good contractor we build form a relationship with. After a long time looking with many failed attempts we found a good one we were very excited about. Infact, after all these failed contractor interviews my agent recommended me her brother. Glad she did. He is quite good and honest!

We did a well inspection and that was all we needed to feel confident it was a good deal.

3. We Make Our Best Offer

Here is where we differ significantly from other investors. Most if not all investors will low ball the sellers. They will give really low offers and then after negotiating they hope to meet the seller somewhere in the middle. This works sometimes sure, but we do not believe in this method. We want to flip many houses. We do not need to make a fortune every deal we make. We give our highest and best offer the first time , everytime. We will make our minimum/reasonable profit per deal, but we make many deals. This way, we win, seller wins, our contractor wins, our agent wins, EVERYONE wins!

Now we have the ARV and a repair quote. After facturing in holding cost, insurance on the house selling costs, agent fees we can now make a great offer. We make this a very simple process to be honest. We just assume that al the costs involved with selling a house is 10% of the ARV. So for this case, if we sold the house for $170,000 after the repairs the selling cost would be $17,000. This includes realtor commissions.

4. Sign Contract & Close Escrow

We often get our offers accepted as we do give amazing offers, and we closed ASAP. This concludes the buying process and now we are ready to put on our flipping hats!

How We Flip This House

Before doing anything we need a game plan. Never just start flipping and figure it out as you go.

First we need to make sure the contracts are solid. Right wording and a clear layout and procedure if and when something goes wrong, both with the flip, or with the contractor.

Next we need to solidify the scope of work and assign solid deadlines


Phase 1: Demo/Interior Framing layout walls and rooms. [10 days]

  • Demo whole house/clean up interior
  • Expand walkway between living room to eating are by 3 feet (install new header)
  • Frame up new laundry area, frame bedroom wall
  • Frame up new patio sliding rough opening and install new sliding patio door
  • Fix water damage floor in hallway
  • Tile bathroom floor and walls
  • Install rough electrical throughout house.
  • Install rough plumbing throughout house.
  • Install insulation and drywall sheetrock
  • Measure windows/door. Place order for items

*Material cost of this section: Seven Thousand Dollars. $7,000,-


 

Phase 2: Roofing/Exterior Windows and doors. [5 days]

  • Close up external side door between living room and kitchen, patch siding, patch wall
  • Replace windows, replace front entry door, power wash house/deck
  • Restoration of vinyl siding which includes power washing and replace any missing pieces of siding.

*Material cost of this section: Eight Thousand Nine Hundred and Sixty-four Dollars. $8,964,-


 

Phase 3: Interior paint/ Install kitchen cabinets and granite countertops. [5 days]

  • Install bathroom vanities, toilets, sinks, tubs.
  • Install hardwood flooring, Install baseboard heating, electrical, and plumbing.

*Material cost of this section: Eight Thousand Nine Hundred and Sixty-four Dollars. $8,964.-


 

Phase 4: Sand and stain floorings. [5 days]

  • Final installation of lighting fixtures and electrical plates.
  • Final hardware of doors and cabinets which includes knobs, hinges, plates.
  • Interior trim work.

*Material cost of this section: One Thousand Two Hundred Dollars. $1,200.-


Don’t forget the payment plan. This is important to avoid issues with contractors! (see above in green text)

We are set! Let’s Flip This House

Now that we have a game plan, a schedule, and a payment strategy all agreed with contractor we can swing hammers. So let’s do this already. Because the property is really far from me, and my current rent contract expired I didn’t want to renew so I decided to run an experiment. I will live in the house we are flipping. I want to see if I can work.

… So I moved in!

Day 1: Monday May 14, 2018 -The As Is Condition.

Monday day 1. The house is outdated, messy, and in bad shape. There is power and there is water. Subs come in to evaluate how bad it is. Goal here is to estimate what size dumpster they need. Also they meet with me to get a run down and verification on what work needs to be done. Thus far they have not yet seen the house and of course it is helpful if they could see the amount of work it needs in person.

Tasks:

  • Ordered Dumpster

 

Day 2: Tuesday May 15 2018 – Subs come in to evaluate

Dumpster arrived. The guys waste no time . They arrive at 7 AM. A crew of 5 people. Mexicans. They work hard, loyal, kind, awesome… thus far! I didn’t take a picture of the bathroom and the main bedrooms because they were absolutely nasty. Bathroom was covered in poop. No no not just the toilet, the walls, toilet tub.  Nasty. As I moved in, that is the first thing I did. Cleaned it as best as I could to make it acceptable:

I set up my laptop, put a clean sheet over the sofa, and ready to rough it out. One good thing is, I don’t have t buy food for 5 months. There is food everywhere in the kitchen. In fact it is a bit bizarre, the house has been vacant for at least 7 months. There are clothes in washer, in dryer, food on the stove in pot, … it is as if an alien beamed up this dude suddenly… But it is what it is. Let’s see how long I can last.

The Mexi’s cleaned the place out! Filled a 30 yarder in a few hours. I was impressed.

Tasks:

  • Cleared the place out
  • Demoed walls
  • Removed carpet

 

Day 3: Wednesday May 16 2018 – Here come the issues…

House is ready for new layout. The washer and dryer were in the kitchen. Yeah.. that is not acceptable. We are making a new section for pantry, water heater and washer and dryer. Also bathroom needs to be gutted. sheetrock removed and replaced with proper up to code cement board. We found out the plumbing was complete crap. Pipes were not even connected. Plumber will have to give us a new quote. We are already on a tight budget. Need to figure out where we can cut costs elsewhere…

Tasks:

  • Demo Bathroom
  • Framing
  • Closing a room back up that

 

Day 4: Thursday May 17 2018 – Here come the issues…

House is ready for new layout. The washer and dryer were in the kitchen. Yeah.. that is not acceptable. We are making a new section for pantry, water heater and washer and dryer. Also bathroom needs to be gutted. sheetrock removed and replaced with proper up to code cement board. We found out the plumbing was complete crap. Pipes were not even connected. Plumber will have to give us a new quote. We are already on a tight budget. Need to figure out where we can cut costs elsewhere…

Tasks:

  • Finishing framing
  • Put in Front Door
  • Closing side door
  • Cutting out back door
  • Widening kitchen entry
  • Putting in front door.

Day 5: Friday May 18 2018 – Checking Out The Plumbing

The French door arrived. What a beauty. Time to put it in.

Tasks:

  • Opening Floors To Access And Evaluate Plumbing
  • Put in Back French Door

 

The Issues: There You Are.  Thought You Would Never Show Yourself!

When we first inspected the house we of course saw immediately that the floor was slanted at the end of the hallway. There is a well pump there in that closet.

Obviously that leaked for a long time and that caused the wood beams to rot under the floors and that gave in. So we knew we had to repair it, n biggie… however..

When we opened up the floors we saw this:

 

Yes it is a damn electrical base heater under the floors! And how was it powered? Glad you asked. Like so:

With a friggin extension cord. Oh but that is not all, of course not! It would have been too easy.

None of the plumbing was connected. So all the poop juice just dropped right under the house. And with the vapor barrier (pretty much just a huge plastic sheet) this made sure all the little poopies stayed there nice and fresh and moist. Oh goodie!

But that is not al. Ohhh no no, of course not. They used irrigation piping to plumb the kitchen! Of course, what else would you expect?!

Now we are waiting on a new quote from the plumber to fix all this…

 

No running water at the house, no bathroom and no toilet, no shower. Who wants to smell me now! I will go to the gym and shower there… I guess!

And now we are up to date.

Tomorrow more on this!

Day 6: Monday May 21 2018 – Ordering Windows

We are stuck. Need a new quote and our plumber (the one that gave us a quote already before knowing the plumbing had big issues) now gave us a ridiculous quote of more than double the first quote. Screw that screw him! We are getting new plumbers to give a bid. But everyone seems busy so we need to figure something out.

Tasks:

  • Measuring Windows
  • Order Windows

Day 7: Tuesday May 22 2018 – Fix Floor Joists

As we are figuring out plumbing and electrical (everyone seems busy) we need to keep this project moving along. So we started fixing the sagging floors.

Tasks:

  • Fix Bending beams

 

Day 8: Wednesday May 23 2018 –

Work is still halted (for the most part). We need a plumber and electrician to come in to start and finish rough work. Because plumbing was more involved than we had expected (before opening the floors), we needed to have a new quote. Our original plumber now quoted us double. Shove it up your butt buddy! However we are now stuck without a plumber and we are scrambling to get more plumbers to give us a quote.

As this is in progress I decided to give the landscape tasks some attention. Tried over 15 companies to quote me on the work that needs to be done but everyone is at least 6 to 8 weeks out. That is not acceptable. I got 3 companies to give me a quote however, but they don’t do mowing. Everyone is too busy. They did quote me for weed removal, lawn treatment and mulching. They offered to plant flowers but they advised me to get the flowers myself. Even so they are still  few weeks out. The quote was $560,- for it all. (We are also working on an other house with a much larger yard nd that quote was for $900,-). Nore on that house in an other blog adventure soon!

Tasks:

  • Buying lawn mower
  • Mow the lawn
  • Buying Windows
  • Got Quote for The Driveway

Day 9: Thursday May 24 2018 – Moving on

We can not keep waiting for the electrician and plumber, so we started tackling items later on the schedule. We started working on the finishes of the french door we put in and on the door on the side of the house that we removed. Then we started removing the popcorn finish on the ceiling. This was extremely tedious and labour intensive.  We are trying to come up with other tasks we can tackle while we wait on the plumber. We decided to fix  this one spot on the roof that needed attention.

Tasks:

  • Roof Repair
  • Removing popcorn ceiling
  • Siding finishes of the doors

Day 10: Friday May 25 2018 – Moving on

Because the popcorn ceiling had paint all over it (don’t ask) it was a bitch to remove. Our awesome contractor just went ahead and bought some sheetrock and sheetrocked over it. He said, it would be the same cost as although the sheetrock cost money, it required far less labour. They got all the rooms and the living room done in just a few hours.

Tasks:

  • Buy Sheetrock
  • Install Exterior light mounts
  • Install Sheetrock

Day 11: Monday May 28 2018 – No one shows up..

Day 12: Tuesday May 29 2018 – Helloooo  Hloooo… looooo

ECHOOOOO  choooo.. ooo

Well shit.. whats going on.. no one shows up again

Day 13:Wednesday May 30 2018 – Finally, there you are…

Damn it Rocky, on’t scare me like that…

Well it seems they had to bring mom to hospital, and that took several days. I won’t go into detail as this is personal family stuff.. so fine!  We are almost half way into this flip and it is starting to warm up more now. It is time to think about curb appeal.  We need to landscape. Nothing like a lush green front lawn and some color pops with pretty flowers. Laying down sod is super expensive and we have some time. Why not seed the lawn in? yes, let’s!

Well first we need to prep the yard. Weed everywhere. I tried the weed killer granules.. you know the one where you have to use the scotts spreader to apply it. That stuff just doesnt work (or works way too slowly) and is so expensive. So I placed a craigslist ad and offred a bit of compensation for anyone to remove the weed. Several people replied. I picked one lucky one and voila. Yarded tilled effortlessly (on my end at least).

Meanwhile in the batcave, Mr. Rocky started to do ome sheet rocking. As long as we keep o doing work, we are ok while we wait and hope for a plumber to come along!

Tasks:

  • Fixing ceiling
  • Yard work.
  • Mowed the lawn
  • Sheet rocking

Day 14: Thursday May 31 2018 – No one shows up..

Day 15: Friday June 1 2018 – Still no one.

OK I get it, personal issues to attend to, but this has to stop. had a firm word with my GC. GC already had a talk to Mr. Rocky, and things seemed to be sorted out….

Lets see what happens Monday. We are still ahead of schedule but there is no reason to relax as we still need to find a plumber to start the plumbing. Without plumbing and electrical we are sitting ducks. Work can not continue

 

Day 16: Monday June 4 2018 – Washing the house

Today was a continuous drizzle. Rocky was planning to do some nudding but it was just a chilly wet day so he decided to go get his pressure washer and wash the house and the deck. Like new I tells ya! While they are playing in the rain I decided to get my cheerleading routine on. Look t me go with the hey pom poms! Am I sexy or what! Well let me elaborate a bit on this one. After the dude finished tilling he was supposed to clean and rake the yard (a BITCH of a job omg!) but he had to go. He did a good job tilling so  I let it go. Paid him and I finished the job. Its tougher than you think! I spent  5 hours comping the yard leveling it all out and turning the clumps of dirt into sand and smooth it all out! After that I used a spreader to spread the grass seed and then finished it al up with a layer of hey!

There you have it. Clean house, clean deck and seeded front yard.

Tasks:

  • Fixing ceiling
  • Yard work.
  • Sheet rocking

Day 17: Tuesday June 5 2018 – Back to sheetrock

We are back at it full time. Trying to do whatever work we can, so we do not fall behind due to missing plumber. Today we are doing ceiling sheetrock and other odd ends. I keep busy landscaping as well.

Tasks:

  • Fixing ceiling
  • Yard work.
  • Sheet rocking

Day 18: Wednesday June 6 2018 – Mudding where we can

We really need to get a plumber in here. Time is starting to run out. We have had several plumbers come in but all gave  us ridiculous quotes and they couldn’t start  soon enough. We now have a few more to hear back from…

Tasks:

  • Fixing ceiling
  • Yard work.
  • Sheet rocking

Day 19: Thursday June 7 2018 – FINALLY Windows are coming in!!

Good news everyone. The bay window replacement is in. And hopefully the other windows will be in tomorrow. So here is the spiffy: In our original budget we wanted to fix the od bay window as replacing it would be super costly. Sadly after we tried to fix it we encountered it was not fixable. It was rotten all the way to the core! We still didn’t want to buy a new bay window, so we decided to replace that bay window with a flat window and call it a day!

Tasks:

  • Putting in Bay Window Replacement
  • Fixing and replacing siding
  • Odd ends

Day 20: Friday June 8 2018 – FINALLY More Windows !

The other windows came in. Today we spend the day putting windows in and starting the trim work!

Tasks:

  • Putting in windows
  • Trim

Day 14: Thu

About the Author

MSOOTKAUG

Hello, I am often referred to as "My Supreme Overlord Of The Known And Unknown Galaxy". To make it easier for you feel free to call me MSOOTKAUG. This is all for now!

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