Meet John Dough
I am pleased to introduce “John Dough.” He volunteered to tell his tale of flipping a property when the chips are down. Crazy? We’ll see!
Here’s John, in his own words:
I’m looking to find out if a property can be flipped in the next few months. My name is John Dough and over the next few weeks, I will chronicle my progress as I -- along with two other investors -- acquire a property, renovate it, refinance it, and then try to sell it. My personally feeling is that if you buy in a good location, at a price point that works with the comps, and you produce a quality product that is superior to your competition, you can flip in just about any market. Time will tell if I’m right.How I found the right place:
My favorite search on MLSPIN is by “price per square foot”. I have been looking through that over the past few months and have found some gems. Problem is that the search usually results in a list of properties with street names I’ve never heard of. So I use the interactive map search on the Zip Realty website. I know all the good parts of Boston; I just don’t know all the street names. So, I can zoom into the locations I prefer and can see if anything good pops up. That is how I found this property. It is located in what I would consider an emerging area, as far as desirability goes.
It’s a foreclosure and it needs work – it was half renovated by the former owner (which isn’t too uncommon with the foreclosures boom we are seeing). I ran some quick comps and it looked like there was some cushion there between asking price and future selling price, so one of my business partners and I decided to take a look. We were pleasantly surprised to see a massive unit with most, if not all of the rough work completed. We found the permit card and saw it had sign-offs from the building, electrical, and mechanical inspectors for the rough-ins. The unit had been sheet-rocked and plastered with some trim already installed. This unit was nearly ready to go. Later that afternoon we put together an offer and faxed it over to the seller’s agent. Within a few days we had the unit under agreement. At this point, we had to perform some due diligence to make sure we weren’t missing something wrong with the property. We looked up all the permits on file. We got in touch with the subcontractors that performed the initial work and questioned them to see if they ran into any major problems on site or if they were owed any money for work they did. We went to inspectional services. There was no occupancy permit, so we will need to work with the building inspector to obtain one. Also, we looked on the Suffolk Registry website gave us the master deed, declaration of trust, and condo plans. Additionally, we looked to see the status of the other units in the building. Turns out, they were either foreclosed on already, or were soon to be REO’d. That was probably the biggest negative we found. With no active condo association we’d have a hard time getting financing without a 6(d) certificate. And in the midst of financial crisis we were about to find out first hand how hard it really is to get a mortgage...
More from John Dough soon.
Let’s wish him luck and ask him questions.
