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A REAL estate guru has revealed the step-by-step process they used to make $100,000 flipping a home at 23.
They took to social media to show off the finished product after discovering the residence was in “bad” shape.
Real estate and personal finance expert Darius Welch said he flipped his first home in 2022 for around $100,000Credit: YouTube/Darius Welch
The residence was in bad shape before renovationsCredit: YouTube/Darius Welch
The refurbished property sold for $305,000Credit: YouTube/Darius Welch
“So I made over $100,000 flipping my first house at 23 years old,” influencer Darius Welch (@dariuswelch) noted in a clip on YouTube.
Darius explained that he bought the house in January 2022, a “two-bedroom, one-bath, 1,100 square feet, single-family home.”
It was purchased in Worcester, Massachusetts, about 47 miles southwest of Boston.
In the clip, viewers could see that the house appeared to be positioned on the corner of a road, with some cosmetic damages and structuring issues with the front porch.
“As you guys can see, the condition was pretty bad,” Darius noted while showing images of the inside of the residence.
The pictures showed clothes, dishes, and garbage scattered across the kitchen floor and bedrooms.
Parts of the ceiling had been ripped open to where the insulation was visible, and Darius said the state of the home was “so bad it needed a full gut renovation.”
The real estate guru noted that buying a house like the one he flipped for $100,000 was a double-edged sword, given that it could be very profitable in the end, but it takes a lot of work to get there.
“Finding properties like this is a gold mine, but it’s also the hardest task of being a flipper,” Darius told viewers.
He explained that he was able to discover the property through a business partner who works as a private contractor.
The friend connected him with the former homeowner, and Darius made an offer on the home of $80,000 that they accepted.
Darius knew through research that the comparable cost of the homes in the area was around $290,000 when they were in a completely renovated state.
He could then invest in fixing up the space and ideally profit from the difference between the cost of renovations and the purchase price vs. what it would sell for.
Working with a private money lender and the contractor, Darius completed the renovations on the home in about six months.
“The results were crazy, literally a night and day difference,” the influencer said while showing off pictures of the home after it was fixed.
The images showed the kitchen with new appliances, flooring, paint, and more.
Bedrooms in the home were also re-floored and carpeted with new drywall and paint.
On the outside, it was seen in brand new navy blue siding, and the porch was completely repaired and repainted.
A total of $85,000 was spent on the transformation, according to Darius.
Being a licensed realtor, Darius explained that he listed the property himself, saving him around an additional $9,000 to pay another agent.
In the end, the influencer sold the property for more than its listing price of $305,000 after it was offered at $289,900.
“After closing, when we paid off all our fees, we ended up making over $100,000 in profit,” Darius reiterated.
A screenshot of the check showed $129,622.59.
Even so, Darius stressed to viewers that house flipping is a “risky business with a lot of money on the line,” meaning “everything has to be done on time, on point, and under budget.”
“If not, you could end up losing a lot of money, so making sure you have the right time in place is extremely important,” he warned.
For those who still want to take a stab at flipping their own homes, Darius used his experience to provide a step-by-step process to get it done.
STEP 1
Find the deal through trusted avenues.
Darius recommended personal friends, family, or trusted contractors as contacts for houses that could be profitable if flipped, like his first home.
STEP 2
Check the comparable prices of homes in good shape and the same area as the residence you’re looking to flip.
Darius advised that first-time flippers find at least three comparable residences that have been sold within the year and a one-mile radius.
The selling price of all three residences should then be averaged out.
STEP 3
Calculate the total renovation costs.
The real estate guru suggested that flippers Google for the best local contractors in the area, who will come out and survey the property.
They’ll then bid for the price of renovations.
STEP 4
Using the “secret equation” for real estate investors, otherwise known as the “75 percent rule,” according to Darius, calculate the price that should be offered for the house in order to flip it.
Darius said the comparable price should be multiplied by .75, with that number then subtracted by the total renovation costs.
In his case, that came to the $80,00 that he offered for the home.
Make an earnest money deposit, a portion of the full payment for the home that demonstrates a flipper is willing to pay the complete amount to the former homeowner.
STEP 5
Find a money lender to assist with the deal.
They often require no money to pay down, won’t run a credit check, and won’t require monthly payments.
A money lender is essentially an investor in the process, paying for renovation costs, labor fees, and other incidentals.
Use the Meetup or Eventbrite applications to find a money lender, according to Darius.
STEP 6
Complete the renovations and list the home for sale.
Fortunately for Darius, he is a licensed realtor, meaning those who don’t have their license must hire a separate agent to legally list the home.
For more related content, check out The U.S. Sun’s coverage of a flipper who bought a home for only $50,000 and sold it for $145,000.
The U.S. Sun also has the story of a 12-day-long home flipping process that made a real estate guru $50,000 in profit.
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This article was originally published by a www.the-sun.com . Read the Original article here. .