Hi Reader,

It’s Grace here! 👋🏻

Let's celebrate the weekend with me sharing the REAL numbers on my latest project. I’m going to give you all of the details on my most recent flip, which is my 7th flip of the year. I found this house from a wholesaler - yes you guessed it, the same wholesaler I may or may not be in the doghouse with!

Just one year ago, I had hardly done any flipping. We had only ever sold one property and it was a DIY flip that my partner and I finished the day before we moved to Arizona (talk about stressful) 😩

But in the last year, I committed to building a team and stepping up as the CEO of my business. This has allowed me to scale faster with less time and effort. And if I can do this, then you most definitely can do it too.

The Details:

I used Backflip to fund the purchase and renovation of the property. I’ll tell you more about why I love them in a bit, but I do highly recommend using their free app! Anyways, let’s dig in!

Location: Iowa 🌽🐮

Purchase Price: $54,000

Rehab: $55,646.31

Holding Costs: $4,400

Closing/Lender Costs: $3,500

All in = $117,546.31

It’s under contract and set to close next week for $155,000.

Realtor Fees: $7,700

Seller credits: $3,500

Closing Costs: $1,500

Profit = $24,753.69

ROI (Return on Investment) = 21% ($24,753.69/$117,545.31)

With these numbers I will exceed my minimum flip threshold of 15% ROI.

Because I have built a team I have had to do very little work after the acquisition effort. And I only saw the property one time when I was back in Iowa visiting.

I also want to point out that because of my extremely low-priced market, even a 20% ROI isn’t going to be a massive payday. 💸While the Midwest can be great for cash flow and the ability to get started with little capital...some days I wish I could be the Californians who can make multiple six figures off of ONE project! 🤯 (The grass is always greener right?)

The Truth

If you think I am walking away with ~$25K in my pocket, think again. Too often when we see these flip numbers but we never see the full picture.

✔️ I still have capital gains taxes to pay

✔️ I still have to pay my project manager his project-based bonus

✔️ I still have overhead costs to run my business

So while I wish I took home a nice $25K check, that just isn't how it works. Next time you see someone talking about their flip profit on social media, make sure to remind yourself that those numbers are probably not the full story.

And, when you go to flip a property yourself make sure you are accounting for everything including soft costs like closing costs, permits, holding costs, taxes, insurance, overhead and more.

Lastly, if you are considering buying a value add property soon, consider using Backflip!

From instant deal analysis to securing financing fast, Backflip has you covered. With their platform you can analyze properties, pull comps, estimate profits and apply for a personalized loan - all in one place! Download the app to make strategic investment decisions and have the cash needed to close on the deal.

P.S. I have two more questions for you...

#1 Would you do this deal?! Yes or no and tell me why!

#2 Do you like seeing these breakdowns? Let me know by replying to this email!

Cheers,

Grace

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