Ok, so it dawned on me recently why I keep dragging my feet on writing these blog posts… it’s because I wait way too long after the fact, and then it takes me forever to get my old brain remembering what all went on during the “flip” process. Well today friends, I’m turning over a new leaf and I’m writing about a property that we just SOLD last week 🙂
Ms. Seller originally contacted us in September of 2022. She lived in a 3 bed/2 bath, ranch-style home with her grandson in Knightdale. Ms. Seller wasn’t quite ready to sell the property; she was still searching for a new place to live. She also didn’t want potential buyers walking through the property while they were still living there, so she opted to sign a contract with us opposed to a traditional real estate agent. We pushed the closing date out 120 days and even helped her try and find a new place to stay. We ended up extending the contract twice before we actually closed on the property. We closed in March of 2023 even though Ms. Seller was still living at the property. We negotiated a “rent back” option with Ms. Seller, which allowed her to rent the property on a monthly basis until she found her new home. We rented the home to her for three months before she moved out in early July.
Sometime between closing on the property in March and Ms. Seller moving out in July, we started to toss around the idea of keeping the property as a rental. We originally thought we’d just make the necessary repairs and resell the property. We hadn’t even considered renting as an exit strategy prior to our arrangement with Ms. Seller. We thought shoot, it went pretty smoothly those three months, maybe it’s something we should consider long-term. We reached out to a local property manager and met him at the house. We detailed our plan for repairs (clean out, fresh paint, new carpet) and got a quote from him as to what he thought the property would rent for. It seemed like the perfect property for us to hold onto as our *first* rental property. The house was relatively new (built in 2003), all one level, on city utilities and didn’t seem to require much maintenance. The property manager was confident we’d be able to rent the property for $1,800 – $1,900 a month. We were SO excited! Finally, our first rental!
Well, like most things in this business, the excitement we felt was just a fleeting moment, not a steady state. As it turned out, we didn’t consider how the rising interest rates would effect our mortgage payment. Even with the amount of equity we had in the property, we couldn’t afford to hold it and generate cash flow. Our mortgage payment would have been slightly less than what we could have collected in rent; not to mention management fees and maintenance costs. And since our business (and lives tbh) rely on this cash flow to keep things moving, we decided to change our exit strategy back to selling the property.
Luckily, we didn’t get too far down the rental rabbit hole before realizing it just wasn’t the right time and opportunity for us. We’d already completed the necessary repairs: we fixed the minor issues, installed new carpet, and had the interior painted. We even decided to add a little curb appeal by painting the shutters and front door and also by adding some mulch to the flower beds. I staged the inside with a few decorations here and there and scheduled the listing photos. We ended up using a realtor we knew from our gym. He listed the property mid-August and it sold within just a few days AT ASKING PRICE. Our realtor was absolutely amazing and I would highly recommend him if you’re local to the Raleigh/Durham area.
Although we are a little disappointed we weren’t able to keep the property as a long-term rental, I’m confident that there will be plenty of opportunities for us in the future. Silver lining… this was BY FAR our easiest and most cost effective flip yet! We bought the property for $235k, spent $15k in repairs, and sold it for $313k.
Meredith Worrell 