How This House Flip Went Better Than I Planned

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Editor's Note: Mark Ferguson of Invest Four More loves educating people about what being a real estate investor is really like. In this special Guest Post, he walks us through a recent flip that ended up better — although more challenging — than expected. Spoiler Alert: This isn't what those reality TV shows will tell you!

In June I sold a flip for $279,900 that I had bought in February for $183,000. I made a decent profit on this property and more than I thought I would originally make. There was a huge spread between the purchase price and the selling price, but there are also many costs when flipping houses. While I did well on this flip, I did not make as much money as many would think based on what house-flipping shows teach you.

In this case study I will go over how I found the property, how I rehabbed it, how I financed it, and what all the expenses were. I will also talk about how we found water getting into the basement in four unrelated ways, which we had no idea about when we first bought it.

How Did I Find This Fix-and-Flip Property?

Many people say you cannot find good deals on the multiple listing service (MLS), which is simply not true. There may be fewer deals on the MLS now than there were five years ago, but there are still deals. I live in Colorado, which has one of the hottest real estate markets in the country, and I still get deals from the MLS. In fact, the MLS has the lowest inventory of houses right now, and I still found this house on the service in the following manner:

  • I am a real estate agent, which gives me a huge advantage. I can search the MLS multiple times a day, see houses within hours of being listed and make offers the same day a house is listed.
  • I saw this house the same day it was listed.

  • I knew values in the area, but this was a unique house. So I calculated the ARV (after repaired value) that afternoon.

  • I submitted an offer that was close to what my maximum price was the same day the house was listed.

  • The sellers countered my offer with a slightly higher price, and I accepted.

Fix-and-Flip Home
A Fix-and-Flip Home

The house was listed for $178,000, and I ended up accepting a counter offer above the asking price, at $183,000. I don’t think there were any other offers, and it was strange the seller would counter me above the asking price. But it was still a great deal, so I took it.

How Much Did I Think I Was Going to Make on This Flip?

When I bought the house I assumed it would be worth at least $250,000, but I like to be conservative — I want to make sure I will not lose money if the market changes. I also thought this would be a quick flip with minimal repairs. I've been flipping houses for over 15 years and have flipped more than 125 properties. I almost never ask for an inspection period, and I use my own judgment to estimate repairs and budgets when I make an offer. Sometimes I do a great job, and other times I miss a few things. I also like to be conservative with my numbers in case I miss a repair that is needed or if the repairs take longer than I think.

I thought this house would need only minor repairs. It was a unique property with two units: a four-bedroom, three-bath unit and a one-bedroom, one-bath basement unit. I knew the roof was bad, and I knew we would need new paint, new flooring and other miscellaneous items. Here was my original thought on the budget:

  • New roof: $7,500
  • New flooring: $7,000

  • New interior paint: $3,500

  • Bathroom work: $2,000

  • Miscellaneous items: $5,000

  • Total Budget: $25,000

I always include extra money in the budget for unknowns and the little things that pop up during a remodel. Because I had been doing massive jobs that cost from $40,000 to $60,000, which take forever to finish, I wanted to complete the remodel quickly. I also have anything from 15 to 20 flips going at one time, so the smaller the rehab, the better.

I finance my flips with bank loans, private money and sometimes my own cash and can flip three times as many houses at once by using financing as I could using just cash. I have financing costs, carrying costs and selling costs whenever I flip a house. This is something that is usually left out on television house-flipping shows. Here are the other costs I planned to have on this flip:

  • Financing with a local bank at 5% interest: $5,000
  • Selling costs including real estate agents, title company fees, etc.: $10,000

  • Carrying costs including property taxes, insurance, maintenance, etc.: $3,000

I put 25% down when I get a loan with a local bank and must pay an origination fee, plus some other costs. I am a real estate agent, so I save half a commission when I list a house. But I still have to pay another agent to represent the buyers. Carrying costs can vary greatly based on property taxes, home owners association costs and more, but I am lucky that Colorado has extremely low taxes. After putting all the numbers together, I was looking to make $24,000 on this flip, which is not a huge amount. I shoot for at least a $30,000 profit on every flip I do. However, I made a commission when I bought the house as an agent, which adds another $5,490 to my profit and almost gets me to the $30,000 profit I shoot for. I decided to do this deal because I thought it would be an easy remodel.

Here are more options for financing fix and flips.

Why Did This Flip Not Turn Out to Be an Easy Remodel?

There is no way I could flip as many houses as I do without help. I have a fantastic team, including Nikki, who is my project manager. She helps me decide what to repair, what not to repair, what houses to buy and manages all the contractors. She did not see this house with me, because it was her day off. She decided we needed to make more repairs than I had originally thought. I may have missed a few things in my initial assessment, and we added these things to the budget:

  • New windows throughout the home: $3,000
  • Paint part of the exterior: $1,000

  • New counters in the kitchens: $1,000

  • Concrete work: $2,000

  • Increased costs: $7,000

Fix-and-Flip Home Interior
The Interior of my Fix-and-Flip Home Interior

Our budget was now $32,000, but we found even more items that needed repairing. One of the furnaces was bad, the hot water heaters were bad and we had multiple water issues. I have never had a house with so many different water leaks!

  • The basement flooded when we had three inches of rain in 20 minutes, and the plastic gutters overflowed directly into a window well.
  • There was a broken pipe in the ceiling of the basement that was not found until after the flood.

  • The grading was bad on the north side of the house, which allowed water to come in through the foundation when it rained.

  • A hose bib was broken and leaked into the basement, which was not found until after the home was under contract.

After all the issues we encountered with this house, I ended up spending almost $40,000 on the rehab! The house was way over budget but also worth more than I’d first estimated because of some of the repairs we made. It was a little silly of me to think I could repair the house for so little, based on all the other houses we do that always need more work than we think.

How Much Money Did I Actually End Up Making on This Flip?

We finished this flip rather quickly, even though the contractor had to refinish the hardwood floors three times before he got it right. I bought it on Feb. 18, and we listed it on May 18. That may seem like a long time to make repairs, but when I have 15 flips going at once, I do not have contractors who can jump on a project right away. We listed the house for $279,900 and had an investor offer full price the first day on the market. It took me only four months from beginning to end to flip this house, which is below my average of six months. My financing and carrying costs were a little less than I’d assumed, but my repair costs were much higher. Here are the final numbers:

  • Selling price: $279,900
  • Repairs: $40,000

  • Carrying costs: $16,500

  • Commission saved; $5,490

  • Original purchase price: $183,000

  • Total Profit: $45,890

I made much more than I thought on this flip, because it sold for a lot more than I estimated. Part of the higher sales price was from increasing market prices, my being conservative and the extra repairs we made.


Every time I flip a house, I run into a new and challenging situation. This house did better than I thought it would, which has happened a lot recently, thanks to the increasing prices in our area. However, I never count on price increases to make money. Estimating costs is one of the most important parts of flipping, and it helps to be conservative. Things always seem to cost more and take longer than you might think. If you want to learn more about my flipping, is a blog I created that follows my flips, rentals, real estate agent team and much more. I have more than 450 free articles, six paperback books, a weekly podcast and many more resources for real estate investors.

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