Learn how an investor made $100K flipping a home and tackled inspections.
Investing in real estate can be both thrilling and challenging, especially for first-time investors. One client’s journey through a successful flip offers valuable lessons on how to approach the market, handle inspections, and make wise decisions when it comes to renovations and partnerships. Let's take a deep dive into her success story.
Successful flip. My client started with a property that was originally listed for $550,000. This price was already lower than other homes in the area, where prices were much higher. There was even a nearby home that had contracted for $859,000, making this property stand out as a great opportunity. My client jumped on the chance and moved forward with the purchase, seeing potential right from the start.
Inspections and renovations. When the inspection was done, it revealed far more issues than expected. The home needed much more than cosmetic updates. It required significant structural repairs. There were plumbing and rewiring issues that needed to be addressed, which brought up questions about whether the investment would be worthwhile. My client didn’t hesitate to push for a reduction, asking for $100,000 off the asking price. Fortunately, the sellers agreed, and the deal moved forward.
"Having a knowledgeable and reliable agent is vital for any real estate investment."
The renovation process was extensive. The house was stripped down to its studs, rewiring was completed, and modern amenities were added. One of the most important areas to focus on was the kitchen, a key selling point in any home. The bathrooms were also completely redone. After all the work, the home was appraised at $738,000, resulting in a profit of over $100,000 for my client.
Advice for first-time investors. Looking back on this flip, my client gained valuable insight into the process, especially with future investments. They’re now working on two other flips, with one expected to generate a good profit and the other possibly breaking even. The lesson learned is that older homes carry risks, especially when it comes to major repairs. For the second flip, my client took on a property that needed foundation work, and while the costs for that were expected, additional plumbing issues arose.
For anyone looking to invest for the first time, my client recommends sticking with properties that only require cosmetic updates. These types of homes typically offer a solid return without the added risk of major structural issues. They also emphasize the importance of running the numbers carefully and having a contingency budget. Even experienced investors need to be cautious about big repairs like foundation, plumbing, or HVAC systems, and it’s always crucial to conduct thorough inspections.
Importance of a trusted agent. Having a knowledgeable and reliable agent is vital for any real estate investment. In this case, my client learned the importance of having an agent who understands the local market and can provide solid advice on pricing and after-repair value (ARV). It’s essential to price a home competitively from the start and market it aggressively. Overpricing a property can lead to a longer time on the market, which could require price reductions and ultimately eat into potential profits.
Throughout the process, my client appreciated the focus on smart, calculated decisions over rushing into a deal. They’ve since found that working with an agent who is knowledgeable and committed to their success has played a big role in their growth as an investor. If you need guidance or have questions, don't hesitate to reach out. Contact me at (210) 906-9599 or email me at [email protected]. Ready to be a success story? Let's start today!
