I often wonder if flipping a house is as easy and glamorous as it appears on TV. Lucky me, my favorite real estate agent, Jenne Kendziora, took on her first flip project this summer. She was happy to share some real insight into flipping a house in the Raleigh market.
Jenne and her handy husband, Mickey, joined forces with longtime friends and Raleigh residents, Jason and Tiffany Hoke. Together they watched the market and waited for the right opportunity to come along.
J&M: The idea to flip a house together was on the table for about a year. Finding a house where the finances made sense was the hard part until this one literally fell in our lap. I was called for a listing appointment, recommended by a previous client (thank you Rod!) and the owner told me it was in rough shape, he hadn’t lived there in a year and was ready to sell it “as is”. That is when the light bulb came on that made me think this could be the one.
They purchased the home and quickly learned two important lessons.
J&T: Getting the initial mortgage to buy the house was time-consuming, expensive, and an all-around pain. Because the house was in such disrepair the bank made us escrow monies to fix a lot of things before they would even release the funds.
J&M: We knew the HVAC would need to be replaced because it was super old. We did not know the week before closing it would literally stop working, meaning in order to even start demo work in there, we needed it replaced right away because it was way too hot to work in there without it. If you have needed HVAC replaced in July in Raleigh, you know it is not overnight, it is a BUSY time for these companies so we lost a week right from the start.
After the initial hump of the costliest repairs–HVAC, new roof, crawl space work, new deck posts–they had their own version of Chip Gaines’s demo day.
J&M: Everything on the home (inside and out) was original, which means 20 years old. Buyers these days want zero expenses when they move in when it comes to the big ticket items, so we knew we had to take on roof, HVAC, and all things on the interior because it was in very poor condition. Kitchen cabinets were a toss up on keep or replace, they were fine, they were just the vinyl wrapped type and a few spots were starting to peel. Knowing I had a lovely connection at Reico (if anyone ever needs cabinets call Debbie Williams, she is THE BEST), I wanted to replace them all and start new. So, we did.
However, replacing so much of the interior gave the flipping foursome their greatest headache of all.
J&M: Contractors. I learned that the guy that comes in with the best price actually is too good to be true. Maybe you save money, but if they don’t show up or do something wrong, it costs you money and time. I learned that my reliable go-to painter is exactly that, reliable and wonderful. I learned that of all the contractors I have recommended over the years, there is now only one I’d give to my clients. He is who showed up on time, did the work correctly, and although he’s busy, he is worth the wait. So in this process of trusting the wrong people, we lost about 3 weeks of work time. Which means now a full month because of HVAC wait in the beginning. I am sure Mickey could add a lot more to the list of headaches because he dealt with most of them. Like replacing every outlet and cover to make them all white. Sure, it’s not hard, but 5-10 minutes times 60 outlets equal one more small step that took a lot of time!
They experienced plenty of success along the way as well.
J&T: Jenne did a great job picking out all of the finishes and fixtures for the house. We might have put a little more money into it than we needed to, but it really paid off in the end.
The end result? The newly minted house sold in 3 days with multiple offers! I asked each couple what they would do differently for next time.
J&T: Avoid getting a conventional bank loan if possible.
J&M: I wouldn’t lose weeks next time, because I would bring in the contractor from the beginning to help with each step, instead of doing so much on our own. When we all work full time and are parents, there isn’t much left over time so keep it to the pros and budget for labor! Weeks matter when you are paying a mortgage much more than if you purchased with cash.
Bottom Line: Flipping a house takes a lot of hard work, multi-tasking, and patience. Not quite my definition of easy or glamorous.
BEFORE & AFTER