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Inside a Fix and Flip: What We're Spending and What We'll Make · The Investor Shed Podcast

• speaker-1: Well, welcome everybody to the Investor Shed podcast. I'm Nick Beverage, your host here with the greatest co-host of all, Jeremy Dwellenkitchen. speaker-0: Thank you for saying my full name. Would you like to my social as well? But I'll give it to you after the show. You can do it on the next one. Thank you. Appreciate it. Speaking of greatest co-hosts, we have a little different environment today, I would say. speaker-1: I don't know it. Yeah. I think we have the most suiting environment for this podcast that we've ever had. Because normally we do it at a studio or a shed. We talk about real estate investing. We talk about houses all the time and we are in an environment that's very weird. The studio. But I feel like we can really get in the mood today because we are sitting inside my newest fix and flip property that I just closed on. Thank you. Yeah. Isn't it nice? Yeah. speaker-0: I wouldn't say it's weird. It's a studio. This thing's a beauty. speaker-1: So ⁓ unfortunately for those just listening to the audio, you're not going to get the speaker-0: It's sound like every other podcast we've done. ⁓ speaker-1: No, there's so many podcasts where you can just listen to the audio and get along just fine. Yeah, yeah. speaker-0: This one, we'll make it sound like, so I mean, obviously, like, we're gonna talk about the features of the house, the price you paid for it, like, you're not gonna miss out other than seeing what the house looks like. Other than that, it's gonna be business as usual. speaker-1: think we'll just talk a little bit about this, fixing and flipping in general and how to get started. And then I think eventually we'll pull the camera out of its ⁓ little holder and do a little walk around too before the end of the episode. How's that sound? All right. speaker-0: Great. All right. Let's do it. So this is your newest fix and flip, Nick. ⁓ Walk me through it. So when did you hear about this property and when did you, what made you pull the trigger on it? Like what were the numbers kind of run me through the whole gambit if you don't mind. speaker-1: Very good question. Okay. ⁓ so when I first heard about it, I don't really remember, but I just remember it was probably about a month before I heard about it again as an opportunity for me to buy. ⁓ so yeah, they're the wholesaler in the Spokane area. and he, he also does deals when he can in, in North Idaho. And fortunately, I'm, I'm kind of his go-to agent in this area to kind of give him an idea of what things should sell for. And that's kind of my specialty is I try to go out, I put on these networking events and I actually try to work and become friends with the people that are out there like knocking on doors, spending the money on marketing, and also people that I can get along with. And I'm just grateful that they do the hard work of going after motivated sellers because that's one thing in my business I've never been very good at. speaker-0: Right. And that's, I know that's a branch you guys are going to be setting up in your. speaker-1: Yeah, and we do that. it doesn't mean we're good. speaker-0: People that are like already established doing this stuff in your corner that you can kind of be like, hey, this is kind of what I'm looking for. If you want to go find properties like this, I'm your buyer. You know what I mean? ⁓ huh. So I think it's good to have those people in your corner and make sure you you really take care of those people because there are a lot of people trying to buy. And it's just like when a wholesaler puts out a deal, how do you become the person, the go to person who they give the deal to? speaker-1: Yeah It's very tricky because it's like how many friends can you actually have and ⁓ what value do you actually have to offer? ⁓ I just happened to, this guy that I got this house from, this was the first time that I've been able to actually work with him and do a transaction. ⁓ But guess what, I met him nine years ago. ⁓ And we talk in real estate, I've been helping him out for nine years about the topic and then he eventually, but he's mostly a Spokane guy. ⁓ sure, he's been on the podcast, George A. Yeah, he's been on the podcast twice. Yeah, he branded hard. Yeah, he's starting to really level up his business. He's got a new acquisition manager. And he's just doing a lot more deals than the ones you choose. ⁓ And, you know, he came across a couple opportunities over the last few months in North Idaho and he's, unfortunately, ⁓ I'm the guy that he calls to kind of get an idea how he should go about, you know, speaker-0: That's awesome. speaker-1: what should he offer on this or what should this sell for? That kind of stuff. Yeah, yeah, okay. So yeah, fortunately that relationship, even if I never did a deal with him, I'm still glad I met George Andrew. He's a nice guy. He's a great guy. He's easy to talk to. But it's pretty sweet. things pay off in more than just friendships. And you can make money too with your friends, which is great. speaker-0: Yeah I think that's really cool. ⁓ Speaking of like you said, like this has been like a nine year relationship with you and George, which I think is fascinating that this is the first time that you guys have actually conducted business together. speaker-1: So I think the lesson there is that if you wanted to get in a position like I'm in where you want to go and flip houses and get great deals, but you don't also want to talk to sellers, then you have to create relationships with people and have a lot of patience. Yeah, because George Anderson isn't my only friend in the business. I have I have several friends that go out there and do similar things that I try to do my best to take care of. I don't ever expect any money. Nope. So that's another thing, too. If somebody's ⁓ calling me and asking for advice or they want to market in this area, they want to know what a certain house could sell for, I'm always willing to help that person out with no money exchange at all just because it could lead to a deal like this one day in the future. And if not, it's just good karma. speaker-0: I agree with you like like I don't think like you should do it with the intention of receiving Yeah, but that's been the same in my photography business I remember like Brian K before I worked with Brian K Yeah His his nephew was doing all his videos and photos and stuff and then he brought his nephew to my office when we were back at KW And he's like hey, can you help my nephew with like just some of these tweaks and like the things you should work on? Yeah I just gave him like a five minute crash course on video and like a vertical for social all this other stuff And then now like Ryan just uses me for his listings because he's just like, ⁓ OK, that's the expert. speaker-1: And now he's not using them as nephews? speaker-0: I don't think his nephew does this work anymore. okay. turned into because I helped. speaker-1: Because you don't mind helping me. Yeah, if you're available, you should always help somebody. That's my opinion because I just think the universe rewards people that offer value whether you're expecting an exchange or not. But if you're offering value to people and you actually help them, eventually you're going to get rewarded. That's just my belief. It's not always true. But in my experience in this business for 15 years now, it seems to be mostly true. ⁓ Most of the time when you help people out without any expectations of anything in return, ⁓ eventually things will happen. speaker-0: It's just that abundancy mindset too, you know what I mean? There's literal abundance in our businesses. There's so many houses to flip, there's so many houses to take photos of. I'm not struggling for any of this stuff and you aren't either. If we were struggling, it's probably because we had a shitty mentality about it though too. You only struggle when you allow yourself to struggle. Yeah. Yeah. Well let's kind of wind it back. We do this all the time. speaker-1: There is an abundance. sure. Let's go back to your first question. We derailed. ⁓ Yeah, so I first heard about it probably about a month before it became an actual kind of almost an opportunity. And he was just trying to get an idea what this property should resell for. He gave me an address and I did, ⁓ it maybe took me 20 minutes of research ⁓ to get him. Maybe not even that, maybe 10 minutes. Because I didn't do a CMA until like the month after when he got it under contract. speaker-0: So you need like a basic analysis of it like, ⁓ this. speaker-1: So about a month later, you know, I forgot all about it, ⁓ which happens just because I do this on a daily basis with people. speaker-0: also don't think you can put your eggs in this basket like you weren't expecting to like buy this house like you had no idea he was even gonna sell it to you speaker-1: No, but I always know that could be an opportunity because it's happened in the past. So that's why I'm always happy to give an idea of what something should sell for. That's my version of cold calls, making cold calls. You don't expect to sell a house on every cold call. anyway, about a month later, he called me. He's like, hey, yeah, we're getting really close on this deal. We'll have it under contract soon. Do you mind actually doing a CMA? ⁓ And so then then I put about an hour into it sure okay Maybe and you know what it used to always take about an hour right these days. It probably takes me now 20 minutes Because I've just done so many of them. Yeah, and the type of house this house is a It was built in the last 20 years sure it's in Post Falls, you know It's a It's a rancher with a basement. Okay. It's got a three-car garage and I was able to speaker-0: and kind of things like this. speaker-1: dig up comps pretty easily within the pulse falls area and make adjustments and give them a pretty good accurate value of like, this, this should, it should resell around 500 grand. Right. ⁓ depending on what a flipper is willing to put into it. Now, I think that's true. Like we're going to go through later today. If I just solve it to this kitchen, ⁓ and cleaned everything up and replace all the carpet. not putting down LVP and did a real light finish in the basement, or maybe didn't even finish the basement at all, I could probably resell this for 500. But it depends on what someone's willing to do. Now, we'll talk later, but I'm going to tear this kitchen out. We're going to do more LVP throughout the floor, upgrade the flooring a little bit, finish out the basement completely. So we'll probably be able to resell this for 530, maybe a little more. OK, cool. speaker-0: Yeah. speaker-1: So speaker-0: Do that extra juice is worth the extra squeeze then, obviously? I think so, I would agree, Finishing out the basement, I'm like, that's already worth whatever money you're going to be putting in. speaker-1: like this just in Most of time it is. Yeah, but it depends on the property. Like I ⁓ flipped a house a year ago in Bonners Ferry ⁓ where I determined that it wasn't worth finishing out a basement even though half the square footage was a basement. ⁓ But it made more sense in that market to try to keep it as affordable as possible. Let's not screw with the basement. Let's just fix up the upstairs and try to keep it at that magical $300,000 price point. speaker-0: just different than baseball's for sure. speaker-1: you know that someone can barely afford. Yeah, yeah. Sorry, not barely afford, but like this could be barely deemed affordable and move-in ready. It's like then somebody can finish out the basement on their own. speaker-0: was a nice house, I remember that house. You guys did a good job on it. speaker-1: With this particular property, I think the juice is worth the squeeze just because there's going to be more buyers for something like this. For sure. So it's worth going a little extra mile to really squeeze a fruit because there's more evidence and proof out there that I can sell it for a certain price. In Bonners Ferry, there really wasn't that much evidence that I can sell it for a certain price if I finished the basement because there were... ⁓ But the evidence was like, hey, if I can just make this FHA moving ready, affordable, then that was the evidence there. So it depends on the property and the location and everything. If finishing a basement makes sense. speaker-0: Absolutely. And pardon me if I missed the number, but I don't think I did. Did you, did you say, so when you running your CMA, what this would sell for to George? speaker-1: Yeah, so all we talked about is, ⁓ so I didn't have to know what the condition was of this property ⁓ at all. All he wants to know is what could this resell for if it was in good quality retail shape? So retail, not sell to an investor. Right, right. Fixed basically. Yeah, if it's fixed up, move in ready, qualify for loans, clean, what could a rent? What could it sell for? And that number could vary depending on the level of finishes. So it was easy enough to save 500 grand on this one. But it could sway. And I think there was also like a little range. know, it could go up to 530. It can go down to 480, depending on the quality of the renovation. speaker-0: What you actually do then ⁓ for sure speaker-1: Yeah. anyway, I didn't know what he was getting another contract for. That's all he needed me for was a report that showed evidence, showed other comparable properties that were also ⁓ ranchers with full basements and a three car garage in Post Falls. OK. And what did those go for in the last 12 months? Sure. Assuming, you know, 12 months is a long time. It is. But. We in post falls, the market hasn't moved much at all in 12 months. There's really hasn't been any appreciation or depreciation in that mid 500s range or that, you know, the route 500. So I was able to go back more than three months. speaker-0: That makes sense. Obviously, like you said, we haven't seen any like huge appreciation in the area. Coeur d'Alene like a little bit, like Post Falls feels like it's been pretty just stagnant if I'm not mistaken. Sure. Yeah. And that allows you to get more comps out of what you're looking for for your CMAs. But obviously your real estate professional or you should know your market well enough to be like, okay, things are looking like this for X amount of time based off what I'm seeing. This is our numbers. speaker-1: Yeah. Okay. Cool. So to go back, yeah. So, so I gave him the CMA initially and then I also said, Hey, by the way, if you, if you do, you know, I'm the perfect buyer for this house this year. So, and he said, Oh dude, definitely. Yeah. You're, you're the man. I'm going to, I'm going to offer it you first. That's what he said. speaker-0: I want Anytime anyone says that to me too, I'm still like, bullshit, if it happens, cool. Even though he's a friend. He's a friend of mine. he's a friend, it's not a bad thing. speaker-1: What went on in the back of my mind was I've heard that before. Yep. And I know you're not in this business to be my friend. Right. You're in this business to make money and that is okay with me. ⁓ I'm totally fine with that. We can have a friendship and he can still do what's in his best interest when it comes to his finances and his business. He doesn't owe me shit. Right. speaker-0: You're in the business to make money. Yes. As long as you guys intersected a number that makes sense for both of you, that's perfect. speaker-1: So I knew that in the back of my mind that take that with a grain of salt. Right. That he offered it to me upfront. Oh, yeah, yeah, it's yours. All right. Definitely going to be yours. Yeah. But I know, you know, if he got a great deal and he's going to resell it in this market, there's going to be 75 other investors that want this house. Because it's so easy. Yeah. It's you don't really come across a fix and flip. speaker-0: Yes. speaker-1: A great deal in Post Falls of a house was built in the last 20 years. That's really truly a cosmetic. It's a very low risk. And there's just so much more of an appetite of all the the fix and flippers come out of the woodwork. Right. Because it's it started to interrupt you. But there's so many different types of fix and flippers, like with their criteria and like, no, I only want this or I'm willing to do whatever. This type of house, every fix and flipper wants it. Yeah, because it's it's easy to comp out. It was built in the last 20 years. It's going to be, you know, the entry price was in the low three hundredth. The resell around five hundred or more, like there's a good amount of ⁓ healthy amount of margin to it wasn't overpriced. Yeah. So a few days later, I was in ⁓ after he told me that ⁓ I was in. ⁓ It was always during the New Year's. OK. This is a couple of this is almost three months ago. Well. speaker-0: So it's like a month ago. speaker-1: Two months ago, sorry. This was two months ago. ⁓ So yeah, we're filming this towards the end of February. ⁓ So yeah, so I was on vacation with my family and I saw he was gonna, him and his new acquisition manager wanted to get it out there. They got my CMA report. Is TJ the actual? No, it's another George. ⁓ Okay. they put it out to their email list even though George said he would sell it to me. ⁓ speaker-0: acquisition guy? Giorgiuno, that's right, I've of him. speaker-1: And we talked about the price too. was like he was going to put it out at 330. I'm like, dude, I'll buy it. I will buy it. He's like, awesome. Great. And then they put it out on their email list. And then, yeah. And within a half hour, know, within a half hour, they already had three offers. Wow. other people. Yeah. That all wanted it. They'll close without looking at it. And I know George, he's like, hey, I don't want to be like the easy home buyer. He's like, I don't want to create this big war or anything. But he's like, we kind of. speaker-0: What are you doing? speaker-1: Kind of screwed up. I told you you can have it but then my guys want to make the most they can and I just you know, he's like I'm not used to this. Yeah, and I was like totally fair. I'm like And I can't remember if I said in that conversation or maybe called him back at 30 minutes later But I'm like how about you know, I still want this house and I'm to pay you what you need I'm like, why don't I just pay you an extra five grand? Mm-hmm. And then we can just kibosh this right now. Yeah, so instead of 330 I'll pay 335. Okay, and then And then a few hours later, he texted me, he's like, you got a deal. I love it. So we tied it up. I wanted, I'm like, cool, send me the assignment. ⁓ And I wanted to make sure we tied it up legally. Right, yeah, yeah. That day. Before you Because they were doing a walkthrough. a couple, they were going to do a walkthrough like the couple days afterwards on a Friday. OK. I wanted to make sure I was under contract. And I was willing to pay a premium, even though he's a friend of mine. Sure. ⁓ But hey, they have every right to make as much as they want. And if they got that kind of response within a few minutes from sending out to their email list, that three people that said, OK, I'll buy it full At $3.30? Yeah, or whatever. I think someone was even willing to pay more. it's nice to end. I didn't get angry. should. Most people in my position would probably get angry. Yeah. Like, hey, we just had an agreement. You just said, I could buy this. You never have an speaker-0: Until it's in paper, by the way. speaker-1: You're my friend, what are you doing? But there's none of that, I don't care. I mean, it's not that I don't care, but I know what to anticipate. They got a hot product, and ⁓ they offered to me at a certain price, and then they went ahead and put it on their email list anyway, which they have every right to do. And then they got the response of, ⁓ shit, we got gold here, because now we got three people wanting it immediately. ⁓ But the good thing is, they got it under contract for I think $297,500. OK. So with that extra $5,000, now they're making $37,500 on an assignment fee. It's pretty good. And they know I can close. They don't have to trust that if someone's willing to pay a little bit more. I have a track record of flipping houses. They know I'm not going to not show up to closing. And I've already done research on this house. So yeah. I guess I had a little bit of an advantage there. ⁓ And then we did the walkthrough, and I decided I wasn't going to get an inspection either. Because I didn't want to screw anything up, even though I had the right to. ⁓ knew that from walking through it, the worst things that I can expect, maybe there's mold in the attic or something like that. but there's enough margin on this to not throw a fit. And I just wanted to put some good faith out there with George that, hey, I'm just gonna close. I want him to understand that I'm gonna be easy to work with long-term if there's more of these. speaker-0: Right. Yeah, you make it as easy you can on the first one Maybe he's just down the road is like shit Nick was really easy to work with like you are going to be my go-to guy going Yeah, that's just like a subtle thing that you don't have to implement But it is a nice finishing touch there for sure Now coming from a guy who always said like make sure you get the inspection make sure you get the inspection Sure, and I'm not not blaming you I think like you still it's it looks But like, you know, if you're looking at this on video like it looks like a garbage house, but you sure most of this is cosmetic work speaker-1: Shitty. Yeah, well, you know, it's about risk, right? And I know what's the worst that can happen. Because I got a good. The nice thing about buying a house with a basement is like you can see the foundation pretty easily. It's the nice thing about buying a house that was built within 20 years is that it was built to code because they had normal inspections done in Kootenai County. ⁓ I know not to expect. You know, I know what to expect with the electrical panel. I know what to expect with the HVAC system. I don't know what to expect in the attic. There's a possibility that maybe they didn't ⁓ use the proper venting in the last 20 years, and maybe there's mold up there, but it's very unlikely. Even if there was, I know the fixing mold is three grand, so I'm risking three grand, but my net margins look like I'm going to make around 80. $80,000 $95,000 on this. I'm willing to be like, eh, if it costs an extra, maybe there's another $20,000 worth of crap that is hiding somehow in this house. And even if that was the case, I would be fine. There's plenty of margin on that there, if that makes sense. speaker-0: planning on getting an inspection after the fact like just for your own speaker-1: Yes. So when I'm done with the house, ⁓ I'm planning on getting an inspection. That way I can have it available for retail buyers. I love that. And I can go through and just check off, know, what about this house do we need to fix up that we missed or something like that? Yeah. And I can also show all the pencil marks or whatever, pin marks on the inspection report of things that this was fixed, this was fixed, this was fixed. And then that could eliminate an inspection. for the retail buyer, because they can just use that. Yeah, and save the money because it's just recently inspected and he had these things. Maybe they could just get some handyman to inspect the work that I did. speaker-0: If they I think that's such a good thing for people who are selling houses to do. And I know we've talked about it on the podcast before, but I think that is such a valuable piece of intel you can give people. Because then it gives them peace of mind, like, they actually care about this house. They got an inspection beforehand. And I don't have to pay for an inspection. That saves me $600. That just kind of eases their mind into like, oh, OK, this is a nice thing. speaker-1: Yeah, these inspections aren't getting any cheaper. speaker-0: Yeah, it's just a cost of doing business, right? I mean, like you just bake it into your sales at some point. I do want to dive into some numbers on this one. So you bought it for $3.35. What did you have to put down? You did hard money, I'm assuming. Talk to me about what you did there. speaker-1: Yes. So I got a hard money loan for the purchase price and six months of payments. Cool. OK. Nice. So I don't have to make payments for six months. Now I still have to pay for utilities and stuff. Sure. ⁓ And I do have to come out of pocket for the construction. ⁓ So I got a loan for $350,000. OK. And I think I still had to bring like, $600 or something like that. Oh wait, no, you know, I got a refund. That's right I'm pretty sure I got because I put five grand down as earnest money. Okay So when I Came to closing I think I got the money back So I got a loan for 350,000 which covered most my closing costs sure The hard money loan was one point Okay, so 350,000 was a loan amount. So $3,500 fee for putting that together and then six months of payments at 10 % annual interest. Yeah. Okay. So for just to give you a rough idea, I think that's close, close to three grand a month. Sure. Would be the payment if I didn't get that financed in. Now when you're, when you're, when you're doing an interest reserve, just know that you're paying interest on your interest too. Right. So you're paying a little bit more. Yep. ⁓ But it's just nice to not have that extra burden, especially if you want to do multiple projects. ⁓ And then the construction, I have lots of credit cards available. ⁓ I also took out, ⁓ I was doing my bookkeeping a few weeks ago on QuickBooks and I got a pop-up saying, hey, you want some money? Like you're pre-approved right now, no credit checks, won't go against your credit. I just did one those two. $65,000 for a 17 % interest. OK. And I'm like, oh, cool. There's my construction right there. All right. And I just said, yes, it took like two minutes. And this doesn't even go against my credit or anything. Yeah. And then it's just edit. And it's non-collateralized, which is great. And it's not like there's credit card fees. If you're flipping a house, you can't put it all on credit cards. Right. because you usually need some cash to pay labor and stuff, and not everybody takes a credit card. if they do, usually they'll charge an extra 5 % fee sometimes, 2%, 5 % fee, which can really add up. But then you might be saying, but wait, you're paying 17%. Well, that's annually. That's if I had that $65,000 and I drew it all day one and I held it for a full year. That's not going to be. I will have it for just a few months. So it's more like paying half of that 17%. ⁓ And I'm not drawing it all at once. As soon as you draw a certain amount, that's what you're paying interest on. don't look at 17 % and be all scared by it if you have a plan of when it's going to be paid back and how much you need it when. speaker-0: And that's where your spreadsheets kind of come into ⁓ play as well. Like obviously you just bake these numbers into your loan. If the number still makes sense at the end of all these numbers, you push go on the deal. speaker-1: And even if this took a year, it would still make sense at a 17%. Because the deal will pay for itself. speaker-0: It's like 22 % on a credit card anyway, like what's the difference between 17 and 22? Like I feel like you're actually doing speaker-1: Okay. 5 annual. Yeah. But it's, ⁓ I'm not, but it is also a good idea to pay when you have cash. I like to pay down my credit cards as needed that where you're not just always paying the maximum amount of interest always for no reason. ⁓ so whenever I had the cash, usually I'm paying down. If I have more than 20 grand in cash, I'm usually paying down credit cards and then anytime I close on a property, That's when I like pay off almost all my cards and I'm debt free for a while. There you go. Until I run out of money again. But I'm usually reinvesting in other projects or buying a rental or something. speaker-0: You're not going to do all the legwork and the construction yourself here. You're going to hire that out. I'm assuming. Correct. speaker-1: ⁓ Some of it. So we'll walk through and I'll tell you what I'll do myself. ⁓ There's a surprising amount that I think I'm gonna do on my own that I probably won't. ⁓ But I do that. yeah. So we'll walk through the house when you're ready and I'll show you kind of what I'm subbing out and what I'm doing myself. speaker-0: Cool, sounds good. And what's your timeframe on this? So you think you're gonna have it for just a couple months? speaker-1: Yeah, don't, I would think five, six weeks. It depends on how quickly I can get like cabinets installed and stuff. speaker-0: So you're gonna do just, mean, like, obviously while we're here on camera, you're planning on cabinets, renovating the kitchen, doing LVP throughout the living room. And then finishing the basement paint. Like that's gonna be pretty cosmetic for you then, huh? speaker-1: Pretty cosmetic. Yeah, not moving really walls or anything except for downstairs we are going to build a couple walls. So that will take a little bit of time. ⁓ But ⁓ yeah, it's downstairs I'll hire, I'm going to have some help. ⁓ But there's a lot of the work that looks big that I can do by myself pretty quickly. ⁓ In my opinion, yeah, because I enjoy it. speaker-0: your time and money is best spent. This is fun, like we love this stuff. speaker-1: I like, I love doing demo work and putting stuff in my new dump trailer and listening to podcasts and constantly drinking energy drinks and stuff throughout the day. speaker-0: will say like demos like my favorite when I do these things like just ripping out the carpet ripping out the tack strips and stuff like it feels speaker-1: good. And I like doing the cosmetic work I can do a lot of by myself and it's just it just feels good. I like swapping out light fixtures, like swapping out outlets and stuff, yeah, door knobs, door hinges, those kind of things. I just feel like a man when I am able to actually swap out door handles. speaker-0: the real men come in and do the actual physical work. speaker-1: Yeah, and then I say, yeah, do the hard things. speaker-0: Build me walls, I'm gonna change these light socket covers from almond to white. speaker-1: But you know what, usually I never do any framing work. ⁓ But ⁓ I did framing work at the new cabin that we built last, that I was help building. ⁓ And so now I'm pretty confident that I can actually frame that out and it might. stand. I'll have some help. Sure. But I'll probably do more than what I normally do when it comes to snapping in LVP floors and stuff. Not going to do that because that can be screwed up pretty easily even by people that have done it a hundred times. So I'd rather have people do the LVP floors where it won't have any gaps at all. ⁓ And then installing the cabinets and countertops and stuff. I'm to have a company do that. That way it's just done perfectly and there's nothing wrong there. So the things that kind of need perfection the drywall downstairs I will hire out the drywall that way it looks perfect Yeah, that way it doesn't look like a homeowner did it right? so the kind of things that I can get away with where you couldn't tell if an expert did it or if a handyman Did it or just me, you know, are you working? Those are the things? Yes. Okay, so when we're done with this podcast I'm gonna start rolling up carpet and throwing shit in the dumpster And posting stuff on Facebook Marketplace because there's a lot of stuff here to sell too. speaker-0: There is. Yeah. If I didn't have shoots today, I would come back and help you. speaker-1: You can come back whenever you want. Thank you. I appreciate it. speaker-0: ⁓ Well, final thoughts, I have an appointment I have to get to, so let's kind of get this wrapped up if that's okay. ⁓ So obviously planning on holding it for about six weeks for your construction time. Do you know what you're going to put it on the market for? you doing 530? speaker-1: I think that's plan. Yeah, 529. Okay, cool. But it might change when I put it on the market, depending on what is available at that time. Sure. Because if there's nothing that it's competing with or things have gone up higher, then I'll probably mark it up a little bit. Sure. But if all of sudden, you know, there's three other houses in Post Falls that are very similar and they're priced at 519 or something like that, I'll probably have to be competitive. Yeah. And I'm not going to over price this. Right. no matter how good it looks. ⁓ I don't want to compete against that because your days on market will eat you alive. speaker-0: And it'll your interest alive too. Yeah, like the longer it sits, the worse it gets. speaker-1: Yeah, it just costs money to sit on the market. whatever you can do to strategically, don't be stuck on your price. Kind of give you an idea like I should be around 530, but we'll see. We'll see. And that's why I always say we'll see when we go to put it on the market because we have to test it again. See if it has anything changed. What's the new competition? Is there any competition? speaker-0: I think it's gonna be a good time to put that house on the market. It's gonna be kind of like early spring. exactly. Like the market is going to be essentially heating up at that time. speaker-1: It's the best time you can possibly put a house on the market is early spring. speaker-0: is awesome. Very cool. I'm excited for this one, Nick. So congratulations on the acquisition. And I'm looking forward to seeing the completed work. When it's all done, like once this is all done, we should do another podcast in here. Yeah, we can. Everything all done. Just to show, like, put these chairs exactly in the same spot on the LVP. speaker-1: you with everything updated. That sounds great. I think that's a good idea. Okay, cool. speaker-0: Hey, so thank you so much for checking out the Investor Shed Podcast. Nick's getting up to turn off the podcast camera. No, I'm gonna turn it off. No, you're not gonna turn it off? You're gonna keep going? speaker-1: I'm not gonna Yeah, let's just hold it. What do you think? Hold it like this? speaker-0: Let's do it. Love it. Okay. Here, let me hold it and I'll get you in frame. speaker-1: Sure. So it's day one of doing a fix and flip. the most important things that I bring, I just bring a bag of tools and make sure I have my drill to unscrew things if needed. But really, this is the most valuable thing. Go to Lowe's and just get a big box of ⁓ contractor bags because you're just going to be throwing shit in trash all day and bringing it out to the dump trailer. speaker-0: And there's going to be more than you think, by the way. speaker-1: Yeah, so that's probably the most useful tool on day one, day two. ⁓ But yeah, I'll show you here in the kitchen. ⁓ This may look like, you know, this kitchen is totally fine and it could be revamped. ⁓ My initial plans with this kitchen was to just paint the countertops. I was going to paint the uppers white and the lowers a dark blue. And I was going to swap these countertops ⁓ out with Quartz countertops and then get new stainless steel appliances ⁓ But since then, you know talking to more people and like Joe Turner and stuff we've realized this is a house where it's gonna be just worth it to rip it all out and just go completely new cabinets and countertops, so It's gonna be ripped out. It may look just like this We may extend this out a little bit. I think for the first time I'm actually gonna do the waterfall So we'll see in our next podcast but I think I would like to actually spend the extra money because I think it just looks cool and I think people might pay a premium for it because I saw a fix and flip Nearby that Dakota property that I did that had the waterfall feature. It was almost the same size house It's sold for like 900 grand and there wasn't much of a difference. They just put a lot of extra upgrades in the property But it was like basically the same type of house gotcha and I sold mine for 580 so an unusual amount of money they got. yeah. So as you can see, there's carpet throughout the living room. My initial plans was to just swap this out for carpet because it's so easy when you just have Lowe's do it. But really, if you're going to want to get more money, LVP throughout the whole living room, the entry area, the kitchen, the bathrooms, and then just carpet the bedrooms. And if you have a basement like this, it's so much easier just to carpet down the stairs and the whole basement. ⁓ That way just feels like home. If that makes sense. For sure. In the bathroom here, we're not going to change up much except for the vanity. So whatever they're doing in the kitchen, they'll also do the same cabinets and countertops in the bathroom. ⁓ And then the LVP floors. And I'll keep this and just clean it up. this should... That'll just be cleaned up? Yes, I think it could all be cleaned up to look new. Okay. Cool. So with the right chemicals, will look good. And fortunately all these doors, these doors even though they're hollow core, in for a house like this is totally fine to keep them. They'll just be cleaned up and we'll swap out the ⁓ door knobs and these hinges for black. ⁓ And then everything will be painted white on white on white on white on white with just black hardware throughout and it will look nice and sharp. These bedrooms are super normal. They're just going to get carpet swapped out and light fixtures and that's about it. speaker-0: The bedrooms? speaker-1: Cool. Carpet in the bedrooms, light fixtures. ⁓ Bedrooms are the easiest thing to remodel. And of course, paint on the exterior or interior. speaker-0: Are you painting the exterior at all? speaker-1: ⁓ No, because it's vinyl. So I've made that mistake before. ⁓ If you paint vinyl siding, it will shrivel up over time and start falling apart. So it's just going to be sprayed. I'm going to power wash the whole exterior and just paint the trim. ⁓ speaker-0: Backyard to getting rid of these barrels. ⁓ no, I like a speaker-1: I dropped my coffee on the carpet, I'm gonna have to clean that up. ⁓ no! speaker-0: ⁓ no! speaker-1: This deck, might be solid. ⁓ If I just give it a hard power washing and then paint it, I think it could be saved. ⁓ No, because it's not three feet. Okay, cool. If you had a, you know, I think a three feet drop off, then you need, it needs railing. Got it. Yeah. speaker-0: Double. Do need handrails on it? speaker-1: Not much to do in the backyard, but just clean it up and throw away the hot tub and barrels and there's all kinds of trash here that just needs to be taken away. ⁓ If you are house flipping more like three or more houses a year, I highly recommend buying one of these. This is a 14 foot dump trailer with four foot walls. This is the most useful tool you can possibly invest in. yeah, look at how much trash you can throw back there. It will save you a lot of trips to the dump. If you're just constantly filling up the back of your truck and going to the dump and thinking you're saving money, you're not. You need to take one of speaker-0: The hydraulic pump on it or the hydraulic? speaker-1: So you push a button, the whole thing lifts up and you drive, it all falls out. You put it back down. You take off. And then you leave. You pay your fee at the dump and you come back to get more stuff. Love it. A house like this, a house like this with as much junk that's through it, that thing will be filled up probably seven to 10 times. Yeah. ⁓ speaker-0: all stuff you've got ready. Sounds about right. Like I you always have more than you anticipate with... speaker-1: Yeah, and you still want to keep it around for throwing away trash too. As you remodel a home, you're going to accumulate boxes and boxes of stuff like stuff that appliances come in and flooring. There's just going to be all kinds of boxes and trash and stuff to throw away that it's almost too much just for a truck and it's nice to have a dump trailer here just to keep filling it up as you need. ⁓ I will swap out these doors because they have ⁓ little pet entries. So these I'll be swapping out just for the same kind of steel doors. I might actually go to Habitat for Humanity for the first time since, you know, in 12 years. Because there's two of them that I need. But I just need six panel steel doors. I'm going to paint them white anyway and change out the hardware. speaker-0: to go about it. speaker-1: ⁓ I don't need the door casing or anything, just the actual door itself. So this is the one time that I think it might be appropriate to save a little money by going to the rehab store. The ReStore. ⁓ Other than that, I hate going to that place. You don't actually really save money. Okay. In here, this is the master bedroom. ⁓ Exact same plan as the other rooms. Just carpet. We'll swap this out for a new black light fixture. ⁓ You don't do the cords anymore these days, so make sure whatever you're buying has a little remote ⁓ and it looks sleek and modern and black, but don't do the cords. Don't be cheap. Okay. And in this bathroom, same exact thing as the other bathroom. Cool. Just going to do a deep cleaning on the shower and everything. ⁓ And yeah, we'll take the hair out. speaker-0: You're a f*** speaker-1: We'll swap the countertop out for the same stuff that the kitchen guys are the kitchen guys will take care of that cool Yeah, and then to save a little money and time. We actually don't have to do backsplash in a house like this the quartz countertops they can cut out like a four inch piece and they'll slap it against ⁓ Against all the backsplash areas. Thank you in the house to avoid the extra step of doing tile work even though tile work is not that hard, but it's just If you're eliminating steps, you're eliminating time and having other people do it, it's just, in my experience, it's just the way to go. ⁓ And I'll show you downstairs. ⁓ There's the door for that, which we'll be using. So we got to finish a basement here, which entails ⁓ running electric through the walls. we got to run for outlets only. And then in this room, we'll keep unfinished because this is the laundry area. And I'm going to get an HVAC guy here just to tune up the HVAC and put a new sticker on it. ⁓ Just make sure that it's functioning well. speaker-0: Get serviced? speaker-1: Because that's something that when you go to resell will be called out by an inspector if they don't see a recent sicker. ⁓ In this, this will be a massive bedroom. Nice. So I couldn't figure out what to do with this room and I had to have my wife here just to approve something because he got this post that's holding up some weight. ⁓ I talked to a framer and we could actually remove this post, but he said it might cause the upstairs would just be a little bouncy. And I'm like, I don't want that. So this will just become one big closet. then somebody can fit a bed right here and just have a kind of a ⁓ slightly L-shaped room. But this will just be one massive bedroom. speaker-0: This is a big room. A like that, I think that's a really good idea. speaker-1: Very cool. So basically just framing up the closet here ⁓ and then framing up a closet here because this other room here. you know, being used as an office, but if you want it to be another bedroom, you need a closet. ⁓ So what we're going to do is just take this wall from here, and it's little over five feet, which is perfect for a closet, and we're going to move it out two feet, and that will give us enough room for a basic bypass closet, and we can rerun this light switch over to this wall so that when you come in, You can flip the switch over here, open the door here, ⁓ and then you'll have a normal set up bedroom here. speaker-0: That's awesome. So you're taking this three bedroom house and you're going to turn it into a five. That's the plan. speaker-1: Yeah, one, two, three, four, five. Love it. And a third bathroom. it will become a bedroom, three bath home. It's pretty good. This is mostly roughed in for a bathroom. We just got to finish it. Sure. speaker-0: right here. It's in good shape in here because nothing's been used it looks like. ⁓ speaker-1: Yeah. So the biggest amount of work down here is drywall. I talked to a guy over the phone and he said it'd be about three grand to do all the drywall work down here. ⁓ I said that sounds great. I don't want to do it because I want it to look perfect. And it's more important for me to look perfect than to try to save a few hundred bucks in labor or something like that. There's also a lot of stuff to sell. This is a perfectly good Bowflex from what I can see. I'll probably put it on Facebook Marketplace. at a cheap price to just get someone to come take it quickly. So that way I don't have to try to get it out of the basement, into the dumpster, and bring it there. So things like this, ⁓ and whatever else I can find that's big and bulky, I'll try to put on Marketplace that way other people can come take it away and give me a little bit of cash to do so. Yeah, but Jeremy's gotta go into another appointment. Appreciate you guys being here on this podcast. and hope you enjoy the part two that we'll do in a few months. Maybe a couple of months from now. Whatever you've it's all finished. See you. speaker-0: Sounds good. All right, we'll see you guys.