Jen’s Friday Night Insights: Fix-n-Flip Edition
Fix-n-flip. Everyone knows the term, and most people have been sucked into all-day marathons of shows like “Fixer Upper” and “Property Brothers.” Chip and Joanna Gaines are like family, and Drew and Jonathan Scott are the twin brothers we never had. They all made the fix-n-flip process look so easy. And their profits were always so high! I’d bet we’ve all had the thought “I can do that! How hard can it be?”
Let me be the first to tell you that it’s so hard. Like, almost impossible to be successful. Yes, some of you who are reading this are successful at it, and you’re as rare as a unicorn. You need funding. You need a crew. You need time. You need patience. And above all, you need to have thick skin.
It was the summer of 2015. My sister, brother-in-law and husband all decided that we were going to do it. We were going to go into business together and flip houses. After all, my husband and I had always wanted to do it, so why not? Plus, my employer at the time hired a fortune teller for the summer BBQ they were throwing, and she told me to do it. Fortune tellers are always right, right?
My sister and brother-in-law had just moved from Napa, California, and we were on a mission to be self-employed.
Since, Nate, my husband and I both hold our real estate licenses, we were able to do the grunt work of scouring the listings to find the perfect property to flip. My brother-in-law, Matt, had experience with construction and can fix most things. My sister, Christina, and I were the money managers and also helped with any and all construction duties. Nate split duties with Matt and listed the house when it was ready to go up for sale.
We all had our jobs. I was the only one with a full-time job, so the lion’s share of duties landed on Nate, Matt and Christina, but I was available on nights and weekends to participate.
We looked for the perfect house for months. We saw the most dilapidated, disgusting, disheveled houses on the market. We needed a diamond in the rough, and it was proving quite difficult to find such a place. After four months, we finally turned to the auction.
The auction process is fairly straightforward. There’s a list of properties that are up for auction, and you can get a copy of the list the day prior to the auction. You go drive by the houses you’re interested in, and you show up the next day with a cashier’s check in an amount you’re comfortable spending. Then you wait for your house(s) to come on the block, and you bid for what you want.
What you don’t necessarily know is that there are a lot of big players at the auction, and they’ve been doing this for a long time.
We were newbies, but we figured we were four smart newbies, so we weren’t worried. We knew what house we wanted, and we were going to get it. Our house came on the block, and no one else bid on it, besides us. We chalked it up to good luck, handed over our check and drove to our diamond in the rough.
I’ll take this moment to say I don’t want to change what happened, but I’m not especially happy with our decision. We had a doozy on our hands. We knew it from the first second we drove up. All houses purchased at auction are “as-is,” and you can’t go inside the house prior to purchase. All you can do is drive by and maybe peek in a window.
The weeds in the backyard were as high as the fence. One of the windows had a rock thrown through it. The driveway was heaved and crumbling.
You don’t receive keys at auction because the houses are foreclosures, and the prior occupants literally leave in the middle of the night. We drilled out the locks and were met with a horrific scene. From looking through the windows, the house didn’t look so bad, but as soon as we were able to empirically experience the house in it’s full glory we quickly realized we had made a grave decision.
The foundation was crumbling, and the back half of the house tilted. The kitchen was tiny, and there wasn’t a lot of room to expand. The master bedroom was upstairs and on the opposite end of the house from the three downstairs bedrooms. There was a hot tub instead of a bathtub in the master suite (likely the answer to our foundation problems). The back half of the house and the upstairs master were add-on’s and were unpermitted.
It was a disaster. We budgeted $10,000 for renovations, and it was quickly evident that we needed more than that.
Our initial plan to keep costs down was to do the majority of the work ourselves, which is how we started out. Nate, Matt and Christina worked tirelessly for months, and I joined them at night and on the weekends to get this project done. Then, the most unfortunate thing happened. We met a guy named Joe Adamiak. The con man of all con men.
Joe had been hired by Nate’s and my neighbor to build a new fence between our houses. As neighbors generally do, we split the cost of the fence. Nate got to know Joe during the process and filled him in on our fix-n-flip project. To our delight, Joe was a contractor and would be happy to look at the house and help us out in the areas where we were unable to help ourselves, primarily the foundation work.
We were so relieved to have Joe and his “expertise” come look at our dumpster fire of a house. He walked in and told us he could handle the whole job within our budget numbers. We were elated and rejuvenated. It had been months, we were exhausted and there was no light at the end of the tunnel. It seemed like every time we fixed something, another thing would break.
We hired Joe after an extensive review of his bid. At least one of us would be on the job site every day to manage Joe and his crew. It felt like we were finally getting to the fun part of flipping. Picking out carpet, tile, paint, fixtures and appliances, instead of doing plumbing, landscaping, electrical and cleaning up trash was a dream.
Joe did the minimum and cashed the checks. It wasn’t long before he stopped showing up and stopped answering the phone. Our dream turned into a nightmare, and Joe was a ghost. He had our money, but the job wasn’t complete, and we were insanely frustrated. We hunted him down, and any time we were able to connect with him, he had a laundry list of excuses, backed up by empty promises of future performances.
We were finally to the point where we couldn’t wait any longer. I had a connection who I trusted, and he was able to complete the job for us. He and his wife did the most beautiful tile work I have ever seen. He showed up every day and tackled our biggest headache: the foundation. We painted the kitchen cabinets ourselves, continued with plumbing and electrical repairs and did the landscaping.
After 14 excruciating months, we finally sold the damn thing. Blood, sweat, tears and thousands of dollars over budget, we finally sold it. Closing was set for Sept. 24, 2016. My sister’s birthday. It’ll probably go down in history as the best birthday present Christina has ever received.
We were finally free! I can’t remember the exact amount of our “profit,” but I think it was somewhere around $5,000, split between the two couples. It was hardly worth the work we put into it, and the strain on our familial relationship wasn’t worth a single penny.
Matt and Christina ended up moving back to Napa in March of 2017, and we sued Joe for negligence and breach of contract. We won the lawsuit against him and sang DJ Khaled’s “All I Do Is Win” for the next several days. As to be expected though, Joe split town and never paid us a dime of what he owes us.
I’d like to say we were young and dumb, but we weren’t. We got played and made some poor decisions along the way. The fix-n-flip game is no joke. And it’s not for the faint of heart.
While I don’t recommend home renovation and resale as a source of primary income for the majority of the population, I do recommend learning from your mistakes and moving on. We certainly did, and we’re better off for it.
Now, let’s talk some football.
Jen’s Week 15 Friday Night Insights
We’ve also been fixing and flipping our fantasy football lineups all season. And it’s been a grind. If you’re still reading, it means you’re probably heading into the semi-finals or championship in your league. Congratulations! Here are two players I think are worth looking at it you’re limping into Week 15.
Cole Kmet (TE, Chicago Bears)
Cole Kmet is now rostered in 79 percent of Sleeper leagues for good reason. He’s making a place for himself in the Bears’ offense. He shared 80 percent of the snap shares in the last three games, was targeted 17 times and pulled in a touchdown. Fellow tight end Jimmy Graham has been listed as questionable for the upcoming game against the Vikings, leaving Kmet as the apple of Mitchell Trubisky‘s eye. As a member of the “Cole Kmet Club,” I have no other choice but to sing his praises and watch him dominate for the rest of the season.
Lynn Bowden (WR, Miami Dolphins)
While I’m not a member of the “Lynn Bowden Club,” I do like him this week against the New England Patriots. Last week, Bowden had his best game yet, with 82 yards on seven receptions. Also, Miami’s big-hitting offensive stars DeVante Parker, Jakeem Grant and Mike Gesicki are all questionable for Sunday’s game, which leaves Bowden wide open to catch the pigskin in the endzone.
I always end my columns with a game day drink, and this week is no different.
I’m here to join the conversation, drink in hand and watch this crazy COVID-19 year unfold. Cheers!
Game Day Drink Recipe for the Week:
Cranberry Holiday Punch
- 1 bottle tequila (750 mL)
- 2 liters Sprite
- 2 46 oz cans of pineapple juice
- 1 bottle cranberry juice (64 oz)
- In a punch bowl, combine tequila, pineapple juice and cranberry juice.
- Add the Sprite and stir again.
- Add ice, cranberries and sliced limes for garnish.
Thanks for reading and follow me on Twitter for more motherly and fantasy sports advice @JenPolvogt.