How We Financed Our First Flip

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After sharing our last post on how much we made on our first flip, several people asked us how we actually financed the project. We don’t have wealthy families backing us, and neither of us makes a ton of money in our day jobs—I’m a part-time editor and freelance writer, and Todd is a small business owner who pays himself a modest salary. So how did we come up with the cash to get into real estate investing?

The short answer is, we used money from the sale of our first house to pay for the renovation, and we were able to get a second mortgage because our own home in Richmond was so affordable. The long answer is, a fair amount of research and strategy has gone into every house we’ve bought (going on four now), and luck has been a big factor, too. [Disclaimer: We are not financial advisers and we don’t pretend to be experts on real estate or investing. These are just some things we’ve picked up over the years.]

We bought our first house in Charleston, S.C. in 2011. At the time, I was making $30K a year as an editor at a local paper, and Todd’s business was so young that the bank wouldn’t count his salary toward our mortgage application—so we didn’t have a lot to work with. Our budget was maxed out at $150K, and our options were limited, but we felt like we were throwing our money away on rent.

Our friends encouraged us to buy in the suburbs, where our money would stretch further. But we didn’t see much investment potential there, so we focused our search on one small area on the outskirts of Charleston that might generously be described as “up-and-coming.” Drugs, shootings, hookers, you name it—North Central had it all.

But there were also a few reasons we felt confident it was on the upswing: It was close to downtown (which was rapidly moving northward), it was adjacent to two much nicer neighborhoods, and it was filled with charming historic homes, a growing number of which were being renovated. After looking for about a year, we bought a 700-square-foot cottage at the high end of our budget (pictured above). We got more than a few raised eyebrows from concerned friends at our housewarming party.

Less than four years later, we sold the house for nearly double what we paid for it, and walked away with close to $150,000.

Of course, this isn’t typical. Charleston’s real estate market is insane, and we got really lucky with our timing. We couldn’t even afford to buy on the peninsula if we lived there now. But after doing so well with that house, we knew that there was only one way we wanted to invest the money we made: with more real estate. And that’s when we decided to try our hands at flipping a house.

A few months before selling the Charleston house, we’d decided to move to Richmond from Boston, where we had been renting an apartment. We realized we could never afford to buy anywhere close to Boston, so we started casually Trulia-stalking different cities, and Richmond stood out because of the number of big, beautiful, historic homes that were surprisingly affordable. Most of the houses we found were located in an area, Barton Heights, that seemed a lot like North Central in Charleston—close to the city, close to more expensive neighborhoods, and with a fair amount of renovated houses on the market alongside cheap fixer-uppers. We flew down for a visit, fell in love with the area, and made an offer on our house.

We paid $175,000 for the house, which was about $125,000 less than we were approved for. This gave us the wiggle room to get a second mortgage for our first investment property several months later. As a side note, our own house now appraises for closer to $300K, which means we have enough equity in the property to give us another borrowing option if we need it.

Again, we’ve lucked out a bit with our house purchases so far, but I don’t think you need a windfall to get started in real estate investments. Here are our key takeaways:

  • Buy as soon as you can afford to. If you can scrape together enough for a down payment, you’ll often find the mortgage payment is cheaper than (or at least comparable to) rent (depending on where you live, of course).
  • By placing a home’s investment potential at the top of your list—right alongside a master bath and open floor plan, or whatever else you want out of a home—you’re more likely to walk away with a profit when you move on to your next home.
  • Don’t be afraid to live in an “up-and-coming” area—they usually aren’t as bad as they seem at first glance.
  • Be ready to get out while the gettin’s good. In other words, if you can sell your house and make some money—which you can use to repeat the process again—it’s often worth the hassle of moving.

Neighborhood News: The Future of Brookland Park Boulevard

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via Betty Clicker Photography

Richmond BizSense recently published an article on Brookland Park Boulevard, the historic retail corridor that happens to be a block away from the Griffin House. While the strip has been largely neglected for the last few years, it doesn’t take too much imagination to see what it’s likely to become—and this article is proof of that. Here’s what the owner of Jackson Ward restaurant Saison had to say:

“We have an interest in that part of town. We believe it’s a really forward-looking neighborhood – there are beautiful homes up there – and a really awesome opportunity in a part of town that we think is very underserved that we have interest in doing business in at some point.”

Between its beautiful architecture, low prices, and plentiful vacant storefronts, Brookland Park is poised to be the next hot spot in Richmond. Some have likened it to Scott’s Addition, while others have compared it Carytown. A few businesses have served the local community for decades, like Northside Hardware and Michaela’s Bakeshop. And now, we’re excited to welcome new businesses like Black Hand Coffee Company, a local tattoo artist, and maybe even some new restaurants.

Brookland Park Boulevard may not be much to look at now, but neighborhood residents can sense the buzz surrounding the street and look forward to the day when we can stroll around the corner for a freshly roasted bag of coffee or dinner with friends. It may happen sooner than we think! Read the full article here.

Griffin Before and After: All the Rest

Besides the bathrooms and kitchen, most of the rooms in the Griffin house were in solid shape and didn’t require more than cosmetic work. This involved removing the carpet (oh, the carpet!), refinishing the wood floors, removing the radiators, repairing the trim in some areas, painting, and upgrading light fixtures. Take a look:

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Master

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Griffin Before & After: The Exterior

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The day we’ve been impatiently waiting for is finally here: Listing Day!

It’s been a long, long time since we started this journey on a frigid December day. We had more than a few people act like we were crazy for taking on a major renovation project, but we saw the potential in this house from Day 1 and we couldn’t wait to bring it back to life. We had some surprises along the way, and it took much (much) longer than expected, but we learned a lot and we’re excited to do it again.

When we bought it, the Griffin House was hiding behind a cluster of prickly, deep-rooted bushes. Todd worked hard to remove them with the help of a few friends, and we replaced them with sculptural grasses, purple-hued bushes, and rosebushes. The exterior got some new shingles, a new door, and a fresh coat of paint with a subtle green tint. The backyard got some love too with a lot of cleanup (so many leaves!), a privacy fence, tree-trimming, and repairs to the shed.

She looks a little different, wouldn’t you say?

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Department of the Exterior: Outside Improvements

We’ve spent the last few weeks cleaning up the exterior of the house and building a new privacy fence for the backyard. Let’s take a little trip down memory lane: This is what the house looked like when we first bought it:

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It was hiding behind lots and lots of old bushes, plus the home’s original wood screens and lattice were deteriorating badly. We debated just a bit before deciding to pull out all of the bushes, and we’re so glad we did—it really opens up the yard. Here’s how it looks now:

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As you can see, we also changed up the lattice under the porch. We’d seen a similar treatment on other homes in the neighborhood, and we liked how it gave them a little more modern look without going overboard. Once it’s painted black (along with the porch floor), it’ll match well with the house numbers and light fixture we’ve chosen, which are both a bit more modern as well. The style of this house is very versatile, which makes details like these fun to play with. Here’s a better look at the fence, which has totally transformed the big backyard of this great corner lot:

 

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We’re not quite done with the exterior yet. We’ve been waiting for a stretch of sunny days to get the house pressure-washed and the trim painted, and once that’s done we can do some landscaping and add our new fixtures. We also got a more period-appropriate front door that will bring some sunlight into the foyer—I just have to decide what color to paint it. Red? Cobalt? Something else? We’ll keep you posted.

Laying the Groundwork: A Very Messy House Update

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If you’re wondering why we haven’t posted in awhile, the answer is simple: Because the house is currently in shambles. Our contractors have been hard at work doing all the nitty gritty details like upgrading the electric and plumbing, installing new HVAC and removing the radiators, and framing out new closets and the master bath. It’s not pretty work, but it’s the most important part of this renovation project.

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The Kitchen. 
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HVAC going in in the dining room.
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Upstairs hall bath
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Framing in the master bath/laundry closet
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Todd and Matthew are slowly pulling out the old bushes.

The contractors still have quite a bit of work to do by our March 31 deadline (yeah—they’re really pushing it). Here’s what’s left for them to do:

  • Tile the bathrooms and install sinks/toilets/showers
  • Drywall the upstairs ceilings
  • Paint the exterior
  • Finish the electric/plumbing/HVAC
  • Refinishing the hardwood floors
  • And a bunch of other stuff

Once they’re done, we can take over. Here’s what’s on our punch list:

  • Painting the interior
  • Installing light fixtures
  • Building privacy fence
  • Installing the kitchen (that’s a biggie)
  • Landscaping

Who wants to come help??

Great News for the Neighborhood

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When we were hunting for a house to renovate, we always took into account the surrounding homes. Were they in good shape? Were any being renovated? Had any recently sold? For the Griffin house, we were encouraged by a home that had recently sold for an above-average price on the next block, and another that was undergoing a full renovation two doors down.

As we’ve started our own renovation, we’ve watched the house at 3018 Griffin come to completion and hit the market. The renovator, a local realtor, did a great job of maintaining the home’s historical integrity while still giving it a beautifully modern look. He priced it much higher than we expected—$324,950—and we held our breath to see when and if it would sell.

We didn’t have to wait long. The house sold within a day, for above asking price. This is good news for the person who put so much care into this renovation, and very encouraging news for us! Check out all the photos of the house here.

In related news, Zillow recently ranked Richmond as the fourth hottest housing market in the country for 2016.

Floored!

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Our first order of business after getting the keys to the house: Removing the gnarly carpet from every room. When we first looked at the house, the wood floors appeared to be in good shape, but we weren’t totally sure what was hiding beneath all of that carpet. So we held our breath (literally—there was some crazy dust happening) and got to rolling.

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That carpet may have been ugly, but we can thank it for protecting these floors for the last 50-odd years. Besides a few spots, the floors are in fantastic shape, and not having to refinish them will help us save a lot on this renovation.

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Anyone in the market for some “vintage” carpet? We’ve got quite a bit of it stored out in the shed. Let us know, we’ll make you a deal.

Meet Griffin: The Before Pictures

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If you’re wondering where we will be for the next several months, or what we’ll be doing, you can bet it has something to do with this guy. We’re calling him Griffin (a.k.a. Griffindor), and he’s a project we’ve been planning to take on for about a year.

After looking at multiple historic homes in the area in varying states of disrepair—and making more offers than we remember—we finally got lucky with this four-bedroom, two-bath home on the Northside of Richmond.

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A lovely woman named Gladys had lived in the home for most of her adult life, and although the floors were covered in stained carpet (including the bathroom!), the shed was caving in, and the kitchen probably hadn’t been updated since 1920, it was clear that she had really cared for the house over the years.

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With its high ceilings, spacious rooms, big backyard, and historic details (like an amazing clawfoot tub), we saw the potential in this house, and we decided to take a big—and admittedly scary—leap. This is our first real estate investment project, and we’re hoping it works out. If it does, there’s a good chance this won’t be the last home renovation we’ll be doing.

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We’re pretty excited for the months ahead, and for sharing with you as the transformation takes place.

 

We’ve got a thing for old houses.

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Pop Quiz: What do Charleston, Boston, and Richmond have in common?

Answer: They’re all cities we have called home over the last few years. They’re also cities that are known for their history—and beautiful historic homes.

We’re Erica and Todd Curran, and we’ve always had a thing for old houses. When we started searching for our first home five years ago, age was a crucial factor—we wanted nothing built after 1950. And while the number of bedrooms and the size of the kitchen were important, we were equally won over by details like beadboard walls, soaring ceilings, exposed brick, and lived-in hardwood floors.

That’s our first house, at the top of this post, a nearly 100-year-old cottage near Hampton Park on the Charleston peninsula. We adored living there, but felt the call to move closer to home, and we’ve since bought a 1920s American foursquare in a streetcar suburb of Richmond, Virginia (pictured below, with us and our nieces on the porch). As we’re slowly making this house our own, we’ve decided to embark on a full renovation project on another neighborhood house a few blocks away.

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We’re just two normal 30-somethings, learning as we go. As we move forward with our labors of love, we’re planning to document the process to share with anyone who’s interested. Because we know we’re not the only ones out there who have a thing for old houses.