A House Flipping Success Story Not to Miss

For Texas property investor Anjellea K. Gabriel, her biggest piece of advice to fellow house flippers is don’t underestimate your rehab costs. 

It’s easy to do. And can quickly be a game changer.

Thankfully for Anjellea, her most recent rehab project turned into a great success -- even after dealing with a few setbacks in renovations and estimated costs.

Anjellea is a part-time real estate investor, flipping a couple homes into rentals during the last two years. Check out Anjellea’s most recent success:

A Flipping Success

The skinny on the house: A 38-year-old home at 2,200 square feet in overall good condition; it does need updates to make it marketable and up to par with comparable homes in the area.

Purchase price: $105,000.

Anjellea’s exit strategy: Buy and hold as a rental unit.

Why this property & strategy: Comparables had a substantially higher market value, and the rent potential in the area was good. The neighborhood, school district, quality of potential tenants, minimal operating costs after rehab work and potential resale value made it a solid investment opportunity.

Financing for purchase & rehab: A 6-month, $125,000 hard money loan and cash down.

Rehab work: New paint, lighting, window coverings, porcelain flooring, granite countertops and tile and appliances; replace plumbing fixtures in kitchen and baths and water lines in the attic; other minor repairs throughout.

Rehab costs: $28,000

Turnaround Time: Only 5 weeks.

Rental Income: $1,675 a month,

Appraised value: A whopping $185,000!

Get more real-life property investor examples and tips in this free guide, How to Make a Living Flipping House.

before and after of bathroom

before and after of hallway

before and after of living room

Lessons Learned From the Flip

After the rehab work was complete, Anjellea refinanced the home to a 30-year conventional loan with the home appraising at $185,000. Anjellea says this property was a success to her for 6 main reasons:

6 Things that Made This a Real Estate Success:

  1. The purchase price was considerably below comparable homes in the neighborhood.
  2. Cash to close was attractive ($8,561).
  3. The area has an attractive pool of potential tenants.
  4. Good potential rental income, above comparable rents in other areas.
  5. High appraised value allowed for cash back at conventional loan close.
  6. Great potential for an increase in property value.

While rehab costs went over her planned budget due to misunderstandings with the contractor, Anjellea still recouped those costs in the end. Three lessons she’d pass along to fellow property investors:

3 Things Fellow Property Investors Should Always Do:

  1. Carefully select your contractor. Hire a contractor you trust and feel you can build a working relationship with. This will decrease the chances of miscommunication and misunderstandings.
  2. Know the price point that will yield you the greatest reward considering location, out-of-pocket cash and rental/resale value.
  3. Test paint first. Try out paint on walls before purchasing paint for an entire house. “My gray paint turned into a lovely baby blue when on the walls,” she jokes.

Rehabbing with an Investment Mindset

Jeff Johnson of Catalyst Funding in Houston (Anjellea’s hard money lender and a property investor himself) advises rehabbers and fix-and-flippers to tackle each project with an investment mindset.

Have an exit strategy in mind for each property you evaluate. Determine what makes the most financial sense for your investment portfolio.

Also, begin any investment opportunity by having your financing in-line. Find a hard money lender who specializes in property investing, can provide valuable insight and understands your business plan and the real estate market in your area.

Hard money loans are typically the easiest and fastest way to secure financing for major renovations, quick fix and flips and other real estate investments.

Catalyst Funding is a hard money lender who can help build your real estate investment opportunities. With a background in fix and flip projects and other property investments, we can provide resources and guidance to help you through the entire process. We strive to be more than a lender!

For more information, contact Catalyst Funding or call us at (832) 648-3626.make a living flipping houses