Here are the final numbers for the Def Leppard House Flip.
|Purchase Date:||June 13, 2011|
|Listing Date:||July 21, 2011|
|Contract Date:||September 26, 2011|
|Closing Date:||October 21, 2011|
|Total Days From Purchase To Resell: 130 Days (Just Over 4 Months)|
We had a very interested buyer right out of the gate, but they didn’t want to wait over 60 days to close because of the darn FHA 90 Day Flip Rule nonsense. 🙁
Take a look at the closing costs when selling. That hurts. We still made a great profit however and from start to finish did not require a whole lot of time. The rehab was light and easy. This was really a pretty good flip. 🙂
|Intial Costs and Assumptions|
|Settlement Fees:||$2,159 (title policy, closing fee, insurance, loan fee)|
|Resale Price:||$170,000 (might have to go down to $160k quickly)|
|Estimated Profit:||$63,841 minus holding costs and selling costs and likely reduction in sales price|
|Actual Resale Price:||$164,900|
|Total Holding Costs:||$7,778.36|
|Our Closing Costs:||$447.95|
|Buyer Cost Assistance:||$5,874.10|
|Title Policy & Home Warranty:||$1,685|
|Total Closing Costs:||$17,076.55 (OUCH!)|
geeeeez…look at those holding and closing costs!! But that’s reality….something those shows on tv never talk about. There’s more to a P & L (Profit & Loss) statement than purchase price, repairs and sales price.
Those costs can really add up fast. There are ways to minimize them but most of the ways involve a lot more time and work from us. I still would rather just pay the money (as long as we are making decent profits).
Had a good laugh about the reality shows’ profit and loss items. 🙂
Aren’t you cheating on the numbers a little bit… a “buyer’s assistance” is essentially a straight line reduction in the purchase price. You sold it for $159k versus your estimate of $170k. You’re making your sale price look better and skewing your closing costs with the way you’re organizing things. Not that it matters, the return is still the same.
The buyer’s assistance is closing cost assistance, not a price reduction. The sales price is the sales price. You can call it what you want. You are right, the return is still the same and what really matters.
It bothers me that you are trying to make it sound like we are trying to hype up what it sold for. I had even mentioned in the original post that we might need to drop it to $160k for faster sale. If I wanted to hype everything up, I would do like the reality tv shows and not mention closing costs and holding costs and give an “estimated” profit.
Either way, if I didn’t hit my figure for resale, you might be happy to know I hardly ever do. You’ve got to be willing to reduce your price in this market if the house is not moving.
What is Buyer Cost Assistance?
It is what we paid towards the buyer’s closing costs. We paid that money for fees that they incurred in the transaction to help them as a lot of people just don’t have the ability to cover down payments and these huge amounts for closing costs.
I love your information. You make the process very real. I think a lot of would-be investors hold back out of fear. I am a real estate broker and I too laughed every time the reality Flip show as they give the profit which is not the net profit after expenses, etc. Thanks for these posts.
Crongrats on more success! It’s great to see what you’re doing. While everybody and their brother are saying flipping is impossible, it’s guys like you that remind us to laugh at the foolish naysayers. Keep up the great work and thanks for sharing it!
It’s amazing how many times I read online about people asking about flipping houses and everybody and their dog is saying that flipping is dead. It’s ridiculous. Maybe flipping in the sense of buying a house at full market value and having it appreciate 20% within a matter of months is dead, but that was stupid and dangerous anyway.
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