This is going to be a quick Final Analysis post, as it’s for The Roach Duplex, a property we’ve essentially put no time, work or energy into…
In fact, aside from visiting it twice before purchasing it, putting a new lockbox on it after purchasing it, and meeting the buyer there to sign papers the other day, I actually haven’t spent any time at the property. In total, I’ve spent about 15 minutes at the property, and about 2 hours on the entire investment, from beginning to end. So, regardless of my profit on this one, I knew it would be worth it.
Anyway, here is the run-down of the project results, with the final set of statistics at the bottom…
Timelines
We purchased this property with the intent of turning around and selling it to another investor. While I was hoping to do that quickly, I certainly wasn’t in a rush, and it took a couple months for that ultimate investor to come along. Overall, I held the property for 86 days, during which time we probably had 50 people look at it and three put offers on it.
Here are the key timeline milestones:
- Purchase Offer Date: 1/13/2009
- Purchase Closing Date: 2/16/2009
- Rehab Completion Date: N/A (No Rehab)
- Sale Listing Date: 2/16/2009
- Sale Contract Date: 5/8/2009
- Sale Closing Date: 5/13/2009
The nice thing about the cash sale to another investor is that it only took five days to get from the offer to the close, a refreshing change from all the hassles we deal with by generally selling to owner occupants.
Financials
We bought the property for $22,000. We sold the property for $28,500. And between the purchase and sale, the only costs we incurred were the purchase closing costs, the price of a lockbox, the price of a few signs, and property taxes.
Here is the breakdown of financials for this project:
These are the final numbers for the project. While the $5K profit is by far the smallest we’ve made on a property, the fact that we did essentially zero work on this one makes it the most impressive in terms of overall ROI.
In terms of purely financial ROI, my total investment into this property was $22,594.70; this puts my ROI at over 23%, and adjusted for the time we held the property, my annualized ROI is right about 100%.
Final Statistics
Here are just some of the final statistics that I’ve been tracking for all my projects, and that summarize the success/failure of each project pretty well:
- From Offer to Purchase Time: 34 Days
- Rehab Time: 0 Days
- Selling Days on Market: 81 Days
- Selling Close Time: 5 Days
- Total Hold Time (Close to Close): 86 Days
- Total Profit: $5,287.77
- Return on Investment (ROI): 23.40%
- Annualized ROI: 99.33%
Hi,
After reading tons of information about flipping houses, I have come to your site. Good for you and your wife. You are more realistic than most others. I am 51 year old carpenter that has been recently hurt. I can not get back to work because I hurt my back. My son is a plumber. We need to start flipping right away, but I am a bit confused on where to start. What do you think about auction properties?
Pete –
There are a couple different types of auctions:
1. Foreclosure Auctions: These take place on the courthouse steps every month, and are auctioning off the newly foreclosed properties. Generally, the properties won’t sell below whatever was owed on them prior to foreclosure, so statistically, only about 3% of houses actually sell at these auctions. Those that do sell can be fantastic deals, but they are few and far between. You might have to sift through thousands of properties to find the 3-5 that are worth bidding on at the auction, you’ll need to do a preliminary title search on those to ensure that other money isn’t owed, and then you might have to compete with other buyers who are also interested.
2. REO Auctions. There are a few for-profit companies that hold auctions of listed foreclosed properties, after they’ve gone on the MLS. While you can find deals at these auctions, you also have the issue that banks aren’t required to take any offer, so there are plenty of houses that won’t sell, even if someone offers a reasonable price.
Personally, I don’t like auctions because of all the work required to find that “needle in a haystack”…but that said, I know some people who exclusively concentrate on auctions and find some amazing deals (though they work very hard to find them!)…
Hello J.Scott. I want to start flipping houses have no experience whatsoever have a lot of confidence that I can do this How can I get started ? My wife was into to real-estate for about 5 years she still has past colleagues still in the businesses. Could that benefit us ? Going to order your book as well.
Hey Harry –
Read these and then let me know if you have any questions:
http://www.biggerpockets.com/flippingbooks