Our Second Flip House

Well I think I should start by addressing the fact that it’s taken me almost 9 months to write another blog post! I am very disappointed in myself for dragging my feet for so long! I’ll be honest, this particular property located in Princeton, NC was a doozey and I think I just wanted to put it out of my memory forever. Now that enough time has passed, I’m ready to get out my rose-colored glasses and share our experience 🙂

The back story…

Similar to our first flip in Dunn, we purchased this property from another real estate investor at a decent price. I should also mention that we bought the subject property less than two months after purchasing the house in Dunn. Both properties were similar in purchase price and scope of work; however, we had almost two months of experience under our belt, so there was no way we’d make the same mistakes, right? My husband always says, “we just have to outsell our learning curve.” His outlook may have panned out in other businesses, but it certainly didn’t apply to buying and selling real estate. I think we naively thought that once we closed on the property, we’d fix it up in no time, sell it quickly, and use those profits to finish the repairs needed at the Dunn house. LOL.

See the “before” photos below that were taken when we first purchased the property.

So what happened?

In our professional experience (insert sarcasm here), we determined the house didn’t need much work in order to sell it quickly. Mistake #1 – underestimating the scope of work needed. If you’re going to remodel a property for top dollar, it better look impressive when it hits the market! We hired a subcontractor to come in and start demolition. Once they began tearing into the flooring and some of the walls, it became apparent the house needed a full gut-job. Since this house was originally built in the 50s, it’d seen some remodeling along the way. However, whoever did the work decided to cover over the existing sheetrock instead of ripping it out and replacing it. We had three layers of sheetrock in almost every room of the house. Although, it was super fun seeing the different styles of wallpaper underneath each new layer of drywall! We were beginning to accept the fact that this rehab was becoming overwhelming and expensive (to say the least). We decided it would be best to put the whole project on hold until we had more cash on hand to really finish it the way we wanted to. It was during this 6 month waiting period that we sold the property in Dunn and finally had the funds to resume the remodel work. Only problem with the house sitting vacant for 6 months… the grass and landscaping started to look real overgrown which can lead to neighbors complaining to the Town.

This leads me to Mistake #2 – taking on a HUGE remodel and NOT pulling permits. There’s nothing like pulling up to a jobsite to find a bright orange “Stop Work Order” letter on the front door demanding that we cease ALL construction due to permit violations. Did you know? Permit requirements vary by jurisdiction, but they are typically required for the following: any work over $15k, any structural work, adding or moving electrical/plumbing, and/or swapping out HVAC systems. Turns out, we violated every item on that list and would need to contact the County (& beg for forgiveness) in order to get back on track with our rehab.

We immediately applied for permits with the Johnston County Building Inspection office. Needless to say, they weren’t too happy with us and the unpermitted work we’d performed so far. If you’ve ever dealt with inspectors or been through the inspection process, you’ll know these aren’t the type of people you want to piss off, especially in the early stages of your rehab! Luckily for us, both of the inspectors we worked with gave us some grace and provided us with the information needed to finish out the remodel the right way.

Although the individuals who came to inspect the property were very kind and helpful, we still had some issues communicating with the permitting office. At this point the remodel is mostly complete, we just needed to schedule our final trade inspections. The permitting office refused to schedule the final plumbing inspection until the water was turned on. Likewise, the Town refused to turn the water on until we passed the final inspection. We went round and round in circles trying to figure out what to do here. Ultimately neither the permitting office nor the town was willing to budge, so it was up to us to figure out how to get water to the house from another source.

Fortunately, we’d since made friends with one of the neighbors (possibly the same neighbor who complained to the Town in the first place) and we were able to “borrow” water from his house for our plumbing final. You may be asking yourself, how do you go about borrowing water? Well let me tell you – we hooked a garden hose up to his spicket, snaked it through a window to our house, and filled up both the bathtub and shower base. With standing water in both areas, the inspector to test the water pressure in the lines and pass us for our plumbing final.

What were our takeaways from this rehab?

• You can’t rehab your way out of a bad purchase. Robbing Peter to pay Paul is a terrible solution and it most certainly won’t work out the way you’d hoped.
• Always pull permits when required!
• Don’t piss off building inspectors, the Town or your neighbors – you may need their help one day.

So how did we do on this one?

Well considering all the permitting drama and extra long holding time, we actually came out alright. We purchased the property at $75k and sold it for $190k over a year later (less taxes… YAY). We were extremely fortunate that we sold the property at a time where the market was RED HOT; we probably got more than we should have on this one. Special thanks to Johnston County Building Inspections, the Town of Princeton and an incredibly hot housing market for helping us maximize our profits on this property! We lived to see another day in this crazy world of house-flipping!

You can see some of the finished photos after the remodel was completed below. Also, check out the materials we used for the rehab here.