Were we flipping Crazy? Our first house flip.
Updated: Aug 2
As new partners (in a both professional and a personal capacity), my girlfriend and I decided to do a flip together as our first major business venture. It seemed like the logical thing to do – at the time.
The rationale? Between the two of us we had good knowledge of construction and project management skills. We both had a passion for property investing and developing. We watched a lot of flipping houses shows and we were ready (and overly confident).
We hired a seasoned Contractor to help flip in some gaps in expertise along with acquiring a Real Estate Agent. We were set.
A townhouse in Ajax was purchased. It was an older townhouse, in an older area, near the lake, great bones and in need of lots of TLC.
The house was gutted. The demo stripped the bathroom right down, all the floors were either ripped out or lifted up (all multi layers of them), lots of drywall, walls, toilets, tub, trims, the whole of the kitchen and its’ sink where all dumped. We even got rid of the old deck in the back.
That was the easy part, right? We’ve all been there. It’s great to do a demo. It’s cheap, a great workout and expends lots of energy. It’s the putting it all back together again part that’s not so cheap and challenges your time, resources and budget – not to mention patience, lots of patience.
We were committed in learning, sticking to the budget and plan. Our initial estimations were near accurate which is a huge factor in the success of these types of renovations. There was dedication to keeping all the receipts organized and logged into the spreadsheet that tracked our spending against our estimations. That was key. I cannot tell you enough of the importance of keeping track of those receipts.
Doing a flip provides education for all aspects of a house remodel; plumbing and mold issues, and the necessary electrical upgrades for example. Costs for all these key pieces (however not sexy) add up quickly before the house becomes a home. Unfortunately, these hidden factors sometimes stay hidden from the eye of the buyer and at times and not valued very much. As a reno team, we were always on the same page regarding ensuring a safe home which was up to standards and codes.
A great team is essential full stop. We had a well experienced and seasoned contractor who helped us along the way. He was a great teacher and there was a lot of on the job training.
What was challenging?
We were at the site day in and day out, seven days a week for three months. Doing a flip is all about time and of course we all know that ‘time is money’. Flipping is a time-based business; the longer you hold onto a property, the more you stand to loose in returns. So, from July to September we worked constantly missing out on summer camping, BBQs, parties, family functions and some much-needed down time.
What you almost never see on those great flipping houses TV shows are the nosy and sometimes hostile neighbours. If you experience this type of neighbour you just never forget them. They are always asking when the work will get done, they call the city on you (for possible not permitted work), they constantly complain about the drilling and sawing.
For the record we obeyed all city bylaws about noise, hours of work and never proceeded on a project without the necessary permits. It’s just not worth cutting corners because you will get caught.
The most interesting trait of this type of neighbour is that they feel empowered. They empower themselves right into your house without so much of a ring of the doorbell or a knock on the door. They walk right in, snoop around and act like they are the foreman or something. It never ceased to amaze us (the owners and crew).
What is interesting to note here is that this townhouse’s complete makeover would not only raise the value of our property but the neighbours and the area without them lifting a finger nor spending a cent. So some friendly advice - if your neighbour is making some noise in installing a new pool, patio or landscaping, be patient, you will reap the benefits with no effort.
The house was completed within three months. It sold within two weeks. It was a great outcome.
Would we do it again? Well it’s been ten years since and we still haven’t felt the itch to do another flip. The preferred business within the property investment space for us is to buy, renovate and hold.
With the proceeds of the flip we were able to upgrade and remodel our next property investment which was located in Brampton.
Doing flips can be a lucrative business. What you need is a level expertise, a realistic vision, a competent team and understanding neighbours!
At the end of the day we (as professional and personal partners) had no regrets from that flipping experience.