How We Lost $75K on a House Flip??
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The hosts of Faster House, a flipping company, discuss their latest flipped property in an A-Class area, which they bought for $260,000 and rehabbed for $75,000. However, they are now facing a loss of $75,000 due to a shifting market and interest rates doubling since they purchased the property. They recommend adjusting the buy formula to 70-75% and being conservative in the ARV during market adjustments. They rushed to finish the rehab, sacrificing quality in the process, and multiple issues stacked up, resulting in the loss. They discuss the changing market and how higher quality products are selling better. They play a game called "All the Issues with this House" to highlight the major and minor issues with the property. They emphasize the importance of considering the perspective of the general public when listing or buying a property and avoiding niche properties in today's market. They plan to avoid losing $75,000 on the property by renting it out for $2,500 a month for the next nine months, making about $150 a month in profit. They will then lower their basis in the property and hope to resell it for $380,000 in one to three years. They believe the property is worth $380,000 to $400,000 in its current state, but it has been on the market for over nine months and has lost value. They plan to hold onto the property in hopes of it appreciating over time and making a profit in the future.
The hosts of Faster House, a flipping company, discuss their latest flipped property in an A-Class a