This weekend marks three years since we purchased our very first rehab property, so I thought I would spend a bit of time recapping what we’ve accomplished in the first three years, along with some of the statistics and interesting tidbits of our journey.
Here’s a quick recap of our accomplishments:
- 24 Houses Purchased & Resold (Every One Profitable!)
- 5 Mobile Homes Purchased and Resold (4 out of 5 Profitable)
- 2 Houses Held as Rentals for Short Periods
Of the 24 houses that we purchased and resold, the level work completed breaks down as follows:
- 18 Full Rehabs
- 2 Minor Rehabs
- 4 Wholesales to Other Investors
In addition to the 29 deals that we did directly, we’ve also started carving out a niche helping a couple other investors with their rehab and resales. My wife has staged nearly a dozen other properties for other investors (including a model apartment for an apartment complex), we have managed several rehabs and we have listed and sold several properties for a couple very select investors.
Some financial statistics of the 24 houses purchased and resold:
- Total Profit on Flips: $478,083.10
- Average Profit Per Flip: $19,920.13
- Minimum Profit: $3,416.21 (House #1)
- Maximum Profit: $40,487.06 (House #16)
- Average ROI: $94.37%
- Average Annualized ROI: 421.80%
Also worth noting is that by having our own real estate licenses, we have saved or earned over $82,400 in commissions over the past 3 years. That about one-sixth of our total profit.
Of course, those numbers don’t take into account the cost of employees (myself, my wife and our project manager) nor the overhead costs of the business. Between the costs of being real estate agents (my wife and I), the cost of equipment, vehicle maintenance, staging furniture, etc, we actually spend a good bit of the profits, though I don’t have the exact percentages. So, don’t assume the numbers above are what we’re taking home — it’s a pretty good business, but not that good!
In terms of our rehabs, here are some interesting statistics:
- Average Purchase Price: $47,541
- Average Rehab Costs: $24,242
- Average Rehab Project Time: 28.5 Days
- Average Sale Price: $101,108
- Average Hold Time: 103.4 Days (not including the two rentals)
One of the places where we’ve been tremendously successful is in marketing and selling our properties in this tough market. While many investors have properties sitting for months on end and/or selling for far below what they expected, so far we’ve been very good at getting properties sold quickly and near our expected sales price:
- Average Time From List to First Contract: 17.9 Days
- Average Time From List to Final Contract: 43.0 Days
- Longest Time Property Took To Sell: 184 Days
- Shortest Time Property Took To Sell: 0 Days (Twice)
- Average Sale as % of List Price: 95.2%
Probably my favorite stat above is the 95.2% of sale price to list price. This means that on average, we sold our houses for over 95% of what we *ORIGINALLY* listed the houses for. Even in rare cases where we had to drop our prices, the average was still tremendously high.
Lastly, it’s nice to know that we’ve had a small little impact on our local economy. In addition to rehabbing 24 properties, which inherently improved the neighborhoods where we buy, we spent a good bit of money doing so:
- Gross House Purchase Costs: $1,141,000
- Gross Sales Revenue: $2,426,600
- Total Spent on Contractors: $465,000
- Total Spent at Home Depot: $117,000
It’s amazing that in three years, we’ve bought and sold over $3.5M in real estate and have spent nearly $600,000 on renovation costs.
Congrats! Keep up the great work!
Thanks Mike!
J Scott, Congrats as you have been my inspiration as a new investor. My wife and two baby twin boys just moved to the Johns Creek area a month in a half ago for business purposes and real estate opportunties. I have my GA broker license and dream of what you are doing in my area. Keep up the excellent work !
James
J, I have known you a bit from the moment you stepped foot in Atlanta so I am very happy to see that things have worked out for you all. It always makes me glad to see when good things happen to good people. Plus, if I had not seen some of your rehabs myself I would not have dared doing my first one either. 🙂
Since I have seen so many of your flips I agree with your statement about you guys being able to sell properties relatively quickly. What would you say are the top factors that allow you to do that?
It might be a long answer I know…obviously your quality of rehabbing and staging, IMHO, are keys. Anything else?
@ the other J Scott – I live in Alpharetta. If I can be of assistance feel free to contact me.
Thanks Luis!
I have a couple “Lessons Learned” posts in the queue…stay tuned…
so proud of you and carol!
GREAT to see this post J. My wife was excited to hear the results, as I’ve been reading the blog start to finish and if there was a 2 year update, I missed it, and she was disappointed. 🙂 Congrats on doing it your way, and not sounding like a guru, even though you’re quietly becoming one.
I know you’re having fun helping other local investors & being Daddy, but when you have some time, it would be nice if you could write another one of your “why we think we’re doing as well as we are in this market”/tips for the beginners, in the NEW, worse-than-2009 market.
In my area, fort worth tx and slightly south & west, property values seem to be close to that of yours, where nice simple 3/2’s sell for 85-130. Your blog is an inspiration. And I now have a RE mentor too 🙂
Thanks for everything!
Wow! This is awesome. I thought I was good about keep stats.
You’ve been really good at being able to keep the average hold time down.
Thanks for sharing.
Don’t forget to add a very successful blog as one of your key accomplishments. Any blog stats worth sharing?
Congrats on outstanding work…not bad for a couple of ex-“corporate” folks!
Thanks everyone…greatly appreciated!
As for the blog stats, I’ll save that for a future post… 🙂
Congrats on taking the bull by the horns. Quite the 3 year accomplishment.
Jason
Great work, thanks for sharing. I have never pulled off a flip but your success makes me want to try. So far I have had a small bit of analysis paralysis but I am getting ready to pull the trigger. Thanks for all your info and thoughts.
great job with the market up and down i think alot of people are holding on to their cash and there are some great deals coming down the line for people like yourself that are bold enough to take advange i have and found 2 great deals and i hope even better . what do you think about your area? keep on trucking
wow…
Hey Chris –
My market is ever-changing. Some months there are more deals out there than I can believe and other months I can’t find a single house worth bidding on. That said, these days there is a lot of competition for those good deals, so getting them under contract is getting harder and harder. I don’t know if it’s just the summer (this time of year is always difficult to get things under contract), or if there is a fundamental market shift occurring (more investors), but I hope my competition decides to take a break pretty soon… 🙂
You are a daily inspiration to many of us. Congrats on your first three years of success. We all wish you many more to come! Thank you so much for sharing your experiences with the rest of us.
Thanks Charlie…I really appreciate that!
Sometimes it’s hard to toot your own horn, so I’ll do it for you. On behalf of all the people you and Carol helped out and offered free advice to…. THANK YOU!!!!!!!!!
Thanks Ez…I appreciate that…
Though, to all the people who have send me emails in the past month that I haven’t yet responded to, they should know it’s because I’ve spent all my free time helping you… 🙂
Hi J Scott,
I am a regular reader of your blog, from Pune, India. I myself have a couple of apartments on rent in my city, Pune, and also am very interested in US real estate.
Of course, rents here are very poor, with rent:price ratios of 1:500 on average.
A 2 bedroom apartment here costs approx 125,000 USD and rents out for approx 250 – 300 USD per month.
One question about your profit figure, you mentioned that cost of employees has not been considered. If you consider at least a salary of 70k per year for the three of you, considering all of you are working full time, then the cost of employees in the past three years will be 630k USD. Add you it the cost of medical insurance, etc, which you will have to buy individually, and then also depreciation on fixed assets, etc. In that case, I think there will not be any “profit”.
I guess every entrepreneur should consider that giving up a well paying salaried job is “cost of doing business” and this should be a cost item while calculating profits.
Sorry if this post was negative in tone, that was not my intention at all.
Hi Abeer,
We equate our “profit” with our salary from the business. Ultimately, we don’t pay ourselves a fixed salary; in fact, we don’t take much money out of the business at all. Instead, the profits get rolled back into the business for reinvestment, and at some point, we’ll cash out of the business, with all the original capital plus returns coming to us as profit.
Btw, the numbers I listed don’t take into account the additional income we bring in from other things we do, like managing rehabs, staging, and listing/marketing properties for other investors.
A very impressive record and keep up the good work J. A very informative blog you have here and much value you share with the community.
Hey J,
Great job and congrats, happy anniversary..lol
Very inspirational.
Thank you for sharing.
Peter
Wow – that’s awesome! I like the stats you spelled out – very informative. Going to add my own stats like that to my credibility kit – thanks for the idea! 🙂
J,
I read your post from time to time. Out of all I’ve read and visited I can see my wife and me following your model for success. Good info!
I have just found your blogs. I am reading them house by house – I just can’t stop. My husband likens this to watching reality TV. I love the 123Flip show. We have been investing for 8 years and still find this very informative. The best thing to hear is that there are still deals out there – though sometimes harder to find. Keep up the good work! (Yes, I realize your post was over a year ago, but as I said, I am going thru them house by house which is why you are seeing questions from me on old posts).
Are there certain REIA meetings you like to attend?
Terri,
I don’t generally attend any of the REIA meetings anymore, though I occasionally will speak at some of the sub-groups. I’m actually speaking at the GAREIA Dealmakers group this morning if you happen to attend that one!
Hi J
Wow! That is f***ing awesome dude. I have a property listed now and it’s been awhile, I missed the fall selling time and now have to wait till after the first. My first btw. I got her for $40k and put in $25k and am asking for a measly $95k. It was a real dump and i’m officailly calling her the jungle house because of the condition of the yard, front and back. You could barely see the house for the trees and brush. I love your blog and site and I hope to accomplish what you have soon. My area has TONS of deals but I have too little cash. Is it possible to email you?
I’m looking for some advice and just a good person to talk to about RE investing and you seem like a good one. Kudos to you and your wife for such great work and success.
Danny Abalos
Hi Scott,
I wonder how much of this money goes into your pocket if you dont know exactly could you take a guess (if not in numbers in percent)? I want to get into this business also and wonder how lucrative it is. Also are you planning to make bigger and bigger flips in future which would lead to bigger profits?
Kind Regards Frantz
Hi Frantz,
The amount that will go into your pocket will depend on how you structure your business. For example, I have a full-time project manager who I pay a salary and commission, so that eats into my profits. If I did all the work myself, I could save all that money (but I’d work a lot harder). Also, I have a good bit of expense due to being a real estate agent; but, we also earn a lot in commission thanks to being licensed. The decisions you make about how to run your business will ultimately determine if you take home nearly 100% of the income or much less.
bought a eight room, four bedroom single family house for 70k in putnam ct. doing it all over and it will be very nice. question is do we go with all the appliances? washer, dryer, refrigerator..etc?
thanks..
Dave – Look at your competition (other houses listed for sale)…that should be your guide…
Congrats on making the Top 60 Real Estate Investing Blogs along with us!
Great blog entry, now that I see how much in commission you have saved/earned, I think it makes sense for me to get my RE license. I really enjoy your portfolio statistics, 95% ROI and 28.5d to Avg completion are both spectacular! Thank You…