If you have ever wondered how people get into flipping houses, here is our story of how we got started.
It all started in 2014 when Gerardo and I were looking for a place to live. We had just moved back from Guatemala, and we were looking for an apartment. The market was slow, and houses were foreclosing all over. We went for a hike in Ogden and saw the cutest little house on 22nd street by the bench of the mountains for sale.
Out of curiosity, we looked up how much the house was listed for. We were shocked to find out it was only 50K! We put in an offer, and it was accepted! After finding out that we just had ten days to close on the house, we could not get it, so we had to back out. We were bummed that we did not get the house. But, with our new information that fixer-uppers are not that expensive, we gave up the idea of living in an apartment and decided to continue our house hunt!
We choose home number two
We found another house for the same price on the same street. It was a lot further from the mountains, and the neighborhood was not as nice. I had a great feeling about the house, so we decided to put in an offer. The sellers accepted our offer, and we thought we were weeks away from becoming homeowners! Unfortunately, due to the house’s condition, it did not qualify for a regular FHA loan. The process was very long and drawn out. It took about four months and some creative work by the bankers and myself.
We had to apply for another loan requiring a contractor to bid on fixing the major issues the bank had with the house. They wanted us to fix the roof and paint the house. A contractor friend gave us a bid of $15,000, and that money was put in an escrow account at closing. Once we replaced the roof and painted the house, the money in the escrow account was refunded. Getting a loan from the bank allowed us to get a home for a great deal, without paying expensive hard money fees.
First Time Home Owners
Since a very young age I always dreamed of flipping a house, the problem was I didn’t know how to start. Dreams were starting to come true for me! Buying this house helped us out financially so much! Our mortgage payment was only 500 dollars a month! There is no way we would have ever been able to find an apartment for that price. Also, it was our own house so we could make improvements to it and increase equity.
Once we got it, there was a list of things the bank needed us to do within three months. The biggest job on the list was fixing the roof. An important thing we learned here is ALWAYS rent a dumpster! There were four layers of shingles, with the first layer being wood shingle. We also needed to paint the exterior. The old paint was pretty bad, it was chipped and peeling all over the house. It also had layers of lead paint underneath. A new coat of paint kept the lead sealed away. It was a big job, but once we finished, we could finally start working on the inside. We wanted to get new carpet and paint inside before we moved in.
Not quite move in ready…
The house was not in tip-top shape… Cockroaches everywhere… Pro tip: Mix borax with sugar and water. It kills the roaches off in no time! Also years of caked-on grease all over the walls and cabinets! The home was full of homeowner special DIY projects. There were a lot of cosmetic and necessary structural improvements needed! One fun thing about this house was it had a 300 sqft mother-in-law apartment in the back of the house. My sister and her husband were looking to save some money, so they decided to move in with us! It was fun to have them so close, and we started the tradition of Wednesday night dinners!
Another strange feature about the house was the floor plan. The bathroom door was in the middle of the kitchen! There were a total of four doors in the kitchen and one window, leaving almost no space for cabinets! With the mother-in-law apartment in the back (illegal non-conforming unit), we needed to combine it to the main area of the home. After many drafts and troubleshooting, we decided to move the hall to the end of the kitchen. Creating this hallway would give access to the bathroom and the mother-in-law apartment. We converted the mother-in-law apartment into the master bedroom.
Take it slow when you start flipping homes
A great way to get started flipping houses is to do slowly or on the side if you don’t have a high-interest loan. We worked on the house little by little. We would save money and then fix things as we went. It took about two years from start to finish. Since G and I had full-time jobs, we could only work on the house in the evening and weekends. With such a low mortgage, we were able to save a lot of money and put it towards our house. G did most of the work himself. We had some help on the roof, but that was it. We estimate that we spent around $20,000 give or take. I don’t know why we didn’t keep track of our expenses (rookie mistake), learn from us, and always keep records of your costs. A really easy way to do this is to use a separate account or credit card just for the house. That way, you know how much you spent even if it takes years to finish.
Kitchen
We decided to install concrete countertops in the kitchen. It was our first (and last) time doing it, but they turned out nice. It gives the house a sleek and modern look. I love the contrast of the grey counters with the white cabinets. We added the turquoise penny round tiles to the backsplash. It adds color and fits the style of the craftsman era.
Bathrooms
Main Bath. The Green tile made the bathroom feel so dark and gross. You can not see in the picture but there was a wall in between the shower and the rest of the room. It made the small bathroom feel even smaller.
Master Bathroom. For this bathroom, we had to close off a window where the mirror is. Also, the trap door to the basement was in here, so we had to work around that as well. G found this really cool rain forest green granite and got it for a great deal.
Living Room
Other improvements included refinishing hardwood floors, adding hardwood floor into the living room, new carpet, resurfacing the walls, opening the wall between the kitchen and living room, and replacing the windows.
Bed Room
If you are just starting flipping houses one suggestion I have is don’t go cheap! One of the bigger mistakes we had made with this house was the decision to go cheap on everything. I didn’t think the house would ever be worth then 100k, so I didn’t want to invest much into it. That is why we did things like concrete countertops instead of granite. One crazy thing I did was buy used carpet… I know… who would have thought there was such a thing! It is a carpet that is used at showrooms and then sold super cheap. The carpet was the lowest quality carpet I have ever seen. We definitely learned our lesson. We ended up replacing the carpet in the master bedroom because it was so warn out.
Exterior
The exterior needed a lot of work too. We repainted, put a parking pad in the back, landscaped, and re-did the porch.
Discovering our Brand
When I started flipping houses, I thought to make it work, I would have to use the cheapest materials I could find. To be honest, it is the way a lot of other flippers in Ogden do things. We didn’t use the lowest quality things. We still had hard word floors and semi-custom cabinets, good quality shingles, and paint. I did not want to spend money on things like appliances or lighting. We even saved money on concrete countertops, “used carpet,” and a new swamp cooler instead of paying the price for central air.
When we placed the home on the market, I realized how competitive things were. I also realized that people looked for nicer items in homes, especially new appliances and custom lighting.
This was a great learning experience for us. We discovered that we wanted to make our homes more custom with high design. We realized that there is a market for high-quality homes in Ogden. I also realized how amazing Ogden is, and how it is a highly desirable city (shh I’m trying to keep it a secrete 😉).
Take a look at some of the improvements one of the subsequent homeowners made to the home! I love the way it looks! They did such a great job elevating the space!
A great start for flipping houses
It was hard saying goodbye to our first home. We had put so much work into it, and it was where Gabe was born. We wanted to start our business of flipping houses, and that we needed to sell the house.
By the time we were ready to sell the house, the market had significantly changed two years later. More and more people were in the market to buy homes. We were lucky to buy and sell at the right time. We received multiple offers well above the asking price and sold the house for 145,000 in the end. This profit allowed us to start our business.
We had a few hiccups on this sell. The buyer was getting an FHA loan, and the inspector had some weird requests. One of them being to move the main power line. We contacted Rockey Mountain Power, and they were able to straighten things out with the bank (thankfully)! Also, the buyer was having a hard time with his lender. We eventually closed three months after the offer was made. This profit allowed our business to grow.
Main takeaway if you want to get started in the home flipping business.
- You do not need lots of money to get started. When we bought this home, we did not have a lot of money saved. We were able to get an FHA loan on the house, so we didn’t have to worry about paying high-interest or meeting different deadlines. Having cash on hand will always help, but it is not required.
- Personally having a background in construction and home repair helped us a lot. I also love interior design and love to work on projects. It is possible to hire out all the work that will need to be done in your house, but I recommend learning a few skills and doing some projects DIY. It is a great way to get involved, save money, and learn a thing or two about home care. Once you have gotten a few flips under your belt, you can move on to hiring out most of the work.
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Contact Us
Starting a business can be scary and risky. Flipping this house provided us with enough cash to start taking bigger chances in our investments. If you are interested in investing in real estate but need help getting your dreams started, don’t hesitate to contact us! If you have a house you need to sell that needs a little TLC, contact us, and we can see what we can do for you!