House #45: Final Analysis

October 4, 2013 · 5 comments

We closed on the sale of The WI-3 House earlier this week…

This was another Milwaukee deal. The rehab was basic, other than same MAJOR foundation work that cost over $13,000. But, the rest of the project was cosmetic — redoing the 1.5 baths, updating the kitchen, new roof, interior/exterior paint, new fixtures, etc.

We purchased this one for $94,000 early this year, put about $46,000 in the rehab — and spent way too long rehabbing it (we had a lot of projects going at the same time) — then sold it for $173,900. We ultimately made only $12,500, which isn’t great…but we’re still doing a lot of learning in the Milwaukee market.

Here is how the financials break down:

WI-3 House Financials

This accounting doesn’t take into account any travel costs (the property is out of state), but given that we’re working on a dozen projects in Milwaukee right now, it’s difficult to allocate travel to specific properties. Instead it will get amortized over all projects and deducted as an expense (which is the correct way to do the accounting as well).

5 responses to “House #45: Final Analysis”

  1. Stephen in Florida says:

    Hello, I just wanted to say thanks for sharing this information. I am primarily focusing my current efforts into learning more about the market in Florida, but I believe that staying updated on the atmosphere from around the country is also essential for success. I appreciate that you kept things very clear cut in this post, as this makes finding the essentials much more efficient.

  2. Taylor Green says:

    Hi J,
    How are you finding Milwaukee’s market for flipping? I’m assuming because of the weather it will take a bit longer to flip properties. Are you still aiming for 15% profit of the purchase price?

  3. J Scott says:

    Hey Taylor,

    Milwaukee has been a tough market, but it’s working relatively well. We’re still in the learning phase and we’re finding that things cost a lot more than we expect and take longer than we expect. But, it’s still a decent market to find deals right off the MLS, and there is still a large buyer pool, so that’s good…

  4. Ariel says:

    Hi James, thanks for all the information you post. Your book is very helpful.
    I can not find anything about insurance policy.

    Can you please specify what kind of insurance do you have as developer? General liability? professional liability? It will be appreciated!

  5. J Scott says:

    Hi Ariel,

    My business keeps a liability/umbrella policy in the amount of $2M that covers general liability issues. In addition, on most properties, we get a “builder’s risk” insurance policy that covers vacant houses during renovation. This policy covers things such as theft, vandalism, fire, etc.

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