House Flipping Update | the Hanover property
One of the ongoing house flips I have in the works right now is a deal in Hanover, MA that was once on the brink of collapse. This particular house flip almost never happened, but thanks to some swift negotiation I was able to purchase this house back in August. Since then my team of contractors have been working hard to fix this place up for its future homeowners.
I think the best way for you to learn about the house flipping business is to peer into my business and see how we do things. Books and manuals are great, but nothing beats the real deal. In this post I want to let you in on what's happening with the Hanover flip, inside and out.
House Flip Breakdown | Analyzing the Whitman Property
If you have watched the Whitman Round Table Discussion then you know that this particular house flip got off to a slow start. We actually owned the property for two weeks before we began any renovation work. Of course this is not ideal because I prefer to hit the ground running and start work immediately after closing on a property.
Yet the slow start was actually a good thing. My team and I are finding lots of profitable house flip deals right now, and my team of contractors simply cannot keep up. We are going through some "growing pains." Soon I hope to be working with additional contractors so that we can remain up to speed with our current deal flow, and not have another two week lag time like we did with the Whitman property.
In this post I want to take you through the Whitman deal, from how we found this property all the way to the final renovations. It's been quite the ride and I am really looking forward to the final sale.
How to Analyze Deals Quickly & Submit Offers that Get Accepted
If you flip houses for a living then you know that real estate never sleeps. Often times your phone will ring when you least expect it, and suddenly there is a deal on the table. Smart decisions need to be made quickly when this occurs, or else you may miss out on a valuable money-making opportunity. To excel in the house flipping business, an investor needs to be able to analyze deals quickly and submit offers that get accepted.
Take for example what recently happened to my acquisition manager Bill Roberts and myself over Labor Day weekend. Bill and I were just hanging out, taking it easy and unwinding from what had been an eventful week. We were just about ready to "shut it down" for the weekend when Bill's phone rang.
It was a real estate agent calling on behalf of a local asset manager, about a deal that we had previously passed on. Low and behold the asset manager was now ready to negotiate. As mentioned above, real estate never sleeps!
The #1 Obstacle Preventing People from Flipping Houses
My palms were starting to sweat and I felt hot all over, borderline anxious even. I was in the midst of a meeting with a rather challenging client, whose tile flooring was "just not looking right." The only problem was that the flooring had been changed and altered a few times now, in an effort to make her happy. As cliche as it is I was having an intense case of "The Mondays." I knew I desperately wanted to change careers and get into real estate, yet I was just too fearful to make the leap.
My phone rang just as I finished the meeting with my flooring client. It was my wife, informing me that something was wrong with her vehicle, and that the parts and labor to fix it were going to cost nearly $1,500. That same anxious feeling began brewing again in my gut, and suddenly I felt hot again.
I had been involved in the flooring business my entire life. It was all I ever knew and it had treated me well. Yet something was different now. Going to work had become a grind and I was having trouble finding enjoyment in my career. Problem customers were just the tip of the iceberg. On top of all that finances were getting tight. My family was growing, yet my income was not. Looking a few years down the road I saw college tuition, which scared me half to death.
I had to make a change, not just for me but for my family and our financial future.
A Deal on the Brink | my latest house flip in Hanover, Massachusetts
My acquisition manager Bill and I re-read our Facebook post to make sure it made sense. Neither of us are experts when it comes to social media but we're doing our best.
Both Bill and I have pretty expansive networks on Facebook, mostly friends, family and colleagues. I'm always cautious about promoting my house flipping business with friends and family, but in this case I am pretty happy we did, because it led to our latest house flip deal in Hanover, Massachusetts-a deal that would ultimately stretch my negotiation skills to the brink.
I didn't know it at the time but when we clicked "Post" another local real estate investor saw the status update in his news feed. He then messaged us, letting us know that he had a property he wanted to rehab, but was having trouble with financing. Two days later Bill and I had the contract wrapped up from the investor for a $10,000 wholesale fee.
I'm going to reserve the exact Facebook lingo I used to find this deal for HFS members (click here to learn about our posting strategy). Yet to be honest finding this deal through Facebook was just the tip of the iceberg as far as surprises were concerned. I don't think anyone on my house flipping team expected what was about to happen next.
A Deal on the Brink | my latest flip in Hanover, Massachusetts Extended Article
The call went a little something like this:
“Listen, don’t worry about all the stuff – just knock $10,000 off the price of the house, we’ll clean up all of the stuff on our own”
Then there was a long pause before the investor on the other end of the line responded with:
“OK, let me see what I can do”
15 minutes later he called back, agreed to the proposal and I closed on the deal just days later.
The day after the closing, we had a team of high school kids from my marketing specialist John Fossetti's football team in there hauling out two dumpsters full of junk. We filled up two entire dumpsters and $1200 later (including labor), we had a clean house.
An immediate $8,800 profit for us…