Flipped My First House: Belief In Yourself
Ben Ervin is a naval education and training command system analyst from Pensacola, FL. I want to believe what I’m doing is important; helping our nation’s sailors. Nevertheless, the notion of entrepreneurship always has been appealing to me. I knew that one day I wanted to be my manager. I have wanted this since I was 13 years of age. Yesterday, when my wife and I put our first property on the market, it marked a significant step towards my original objective.
I decided to stop dreaming about flipping houses in October 2017 and began to educate myself about a way to get involved so I could say I flipped my first house. I watched my friend, Nick Armstrong, flip away with his houses and had the opportunity to discuss a bit with him.
Before I flipped my first house, it took me four months to conclude our first contract from that moment. It has not yet been sold, but we are currently in a tight market. I believe, benefit from the high demand for the product that we deliver. In addition to that, the education that I obtained was the truly indispensable aspect of this journey.
I learned a tremendous amount. I learned a great deal. We sure have made errors along the way, but I will absorb the lessons and make use of them. I am intending to use this initial deal as the pad for buying even more homes, including further quick flips and to construct a long-term passive income rental portfolio. Now I’m going to stop wondering what we should do. Although the property has not been sold, I wanted to share my current numbers.
Flipped My First House: By the Numbers
Acquisition Costs (AC): $70,635.50
- Purchase Price: $70,000
- Closing Costs: $510
- Termite Letter: $125
Rehab Costs (RC): $41,185
- Materials: $21,780
- Labor: $19,405
Holding Costs (HC): $870
- Utilities: $450
- Insurance: $420
Selling Costs (SC)
- Assuming Sales Price (SP) of $175k: $10,500
- Commissions to Agents: $10,500
Projected Profit: $51,810 – Taxes & Any Additional Selling Costs
- $175,000(SP) – $10,500(SC) – $870(HC) – $41,185(RC) – $70,635(AC) = $51,810
Flipped My First House: The Power of a Mentor
Another investor, Sidney Torres, worked on buildings when he first got involved in real estate. “I had earned about $40,000 a year since I worked overtime, but I only earned about $20,000 to $22,000 a year if you took my base salary. “Torres was driving around his home city of New Orleans to find the right property to start building his real estate portfolio. One day in the upcoming neighborhood near Tulane and Loyola University, he encountered an affordable property. He thought to myself I haven’t flipped my first house yet, I wonder if now is the right time.
Torres reached out to his grandmother, one of his mentors, to help set up a $40,000 credit line. He remembers that “I begged her to make that offer, but his grandmother, 96 years old now, was not at once impressed. She pressed Torres to produce a formal package with a building plan and financial forecasts.
Torres explains this first contract in depth in an interview with CNBC. “She questioned me about the figures, which was a great exercise for me,” he says. As his grandmother was eventually persuaded, and the project started, Torres felt the weight of his grandmother’s faith in him. “I was nervous, but at the same time, I was also passionate,” he says. “That passion helped me to deal with fear. It pushed me through.”
Torres operated 24/7 and did much manual labor himself, even on Christmas. “As soon as I finished that house, I ended up getting it valued at $100,000 more than I had in it. I refinanced that house, and I took that money, and I bought another house next door,” he says.
Torres shares his story of “how I flipped my first house” and has built over $100 million in property since his first turnaround, hoping others will succeed in the same way he did. He explained in the more recent interview that “you don’t have to have a bunch of money to start on real estate. You just need a good mentor or mentors around you, so you know how to do your homework.