How To Make $49,000 PROFIT on a Fix & Flip
Calvin Hexter
Hello, hello, and good evening, everybody. I hope everyone’s enjoying the beautiful weather we’re having. Instead of, you know, a podcast or I guess, a live of me talking about how chilly it is in Edmonton today is actually very nice. It’s beautiful out. And I’m hoping this is like one of the first days of spring and it just gets nicer, nicer. So today, we got a really interesting topic. I mean, this may be one of the most interesting lives we’ve done probably in the last, I don’t know, week or two. I mean, everyone’s really good. Everyone’s equally special. So I can’t say that – each one is equally great. However, if you are a “fix’n flipper”, or someone that’s looking to do a burr, this is the one you want to watch. And why is that? It’s because we’re going to be talking about how to make $49,000 profit on a fix and flip. Harv, can you tell us a little bit about yourself.
Harv
My name is Harv and thanks for having me, Calvin. Appreciate it. Just like many people, I also work a day job. So I have a nine to five. And this is my side gig. So I’ve been doing this for a couple of years now. And before that we did do build, we have some rental properties. So been down that whole path. And this is kind of our strategy for right now. So we’re trying to aim to do about six flips a year, as long as we can find profitable properties.
Calvin Hexter
Very cool. Very cool. It’s crazy that so there’s a lot of fix and flippers that almost it’s full time. But you manage like, you don’t just have like a full time job. But you also have a family like you’re not single. So like how do you like you have a lot of balls in the air. And plus, I mean, the amount of weddings that I think I’ve seen you go to in the last 12 months. I mean, like how do you have time to do this? It’s crazy.
Harv
It’s challenging for sure. A very understanding wife. Definitely. But I think it’s building a good network, right. So again, have a great realtor, team of renovating contractors that deal with, good suppliers, that type of thing. So I just kind of managed to put this system in place where it kind of runs itself throughout the day. And I go check up on it in the evenings in the weekend. And that’s where I spend my time on making sure that these flips are working for us.
Calvin Hexter
Amazing. Let’s talk about let’s talk about what we’re going to talk about today. Let’s talk about the flip you made a whole bunch of profit on. Why don’t we why don’t we start by looking at this property. So we’re gonna go through this specific property that we’re we’re able to make a really good amount of profit. And I mean, before we go into it even, how much profit are you typically looking to achieve going into? fix’n flip?
Harv
So, when we first started, we were, I’ll be honest, we were doing like smaller townhouses and things like that. So I was happy with like 10 to $15,000 at a minimum, and we were okay with that, because we were just using it to like learn things and go along and just push forward. Now, we’re kind of looking at at least 30 to $60,000 per flip.
Calvin Hexter
And I’m hoping today, you’re gonna give us some of those, some of those golden nuggets so anybody that’s watching that’s maybe just starting out flipping that’s only making maybe 5, 10, $15,000 we’re gonna get some good golden nuggets here today on things that they can do to help scale their their profit way up. So we’re going to talk about we’re gonna talk about one of the recent flips that we did 4119 108 Street, are you ready to go through it?
Harv
Let’s do it.
Calvin Hexter
I guess first of all, what attracted you to this property specifically Harv?
Harv
It was mostly the neighborhood. So just growing up on the south side, I was familiar with the Duggan, the Rideau Park area. And I always put myself in that position of that’s a place where I would want to live in right. So that’s what attracted me to that neighborhood specifically. The other aspects were that it was about a 1300 square foot bungalow. So I figured that it was good for families, it’s close to the LRT station, relatively close to downtown, the UofA, good schools, all of that stuff. The other thing I looked at that… they had three bedrooms up, and at least one full bath, and this one actually had a half bath as well. So that was a bonus. And I like to look at properties that have at least a bathroom in the basement. And the even if it’s an old outdated bathroom in the basement, it’s okay, but it’s just good to have that. The plumbing and all that stuff done. So you’d have to pick up concrete in the basement. So that’s kind of the main things that attracted me to this property particularly.
Calvin Hexter
Okay, so let’s go through the basic what’s the basic rules that you go for when it comes to sorting out a good fix and flip property? So location, obviously, you’re very, you know, quite familiar with location that has to be quite good. Because we know when it’s time to offload the property, we want shorter days on market makes it easier you have more more showings everything else like that. You mentioned a basement bathroom is another checkbox, what are some of the things that are like must haves on your checklist?
Harv
I typically like to have three bedrooms minimum upstairs. So even if it’s a townhouse, like two storey I like to have the three bedrooms. The other thing is it all really comes down to numbers, right? So you can even go into, I would say a less desirable neighborhood. But as long as there’s there’s profit to be made, right? So you kind of reverse engineer the numbers backwards to say, Okay, there’s opportunity here to improve this property and still make a profit. So that’s, that’s basically the main part of it. This one, actually the kitchen. So we were able to, I looked at the kitchen, and it was kind of boxed in, and there was a lot of walls and stuff. So we looked at it and thought we could take out some walls and make this a really cool open space by by expanding the kitchen, opening it up to the living room, the dining room, that type of thing.
Calvin Hexter
And I knew that when I walked through this house, the one thing I really liked (I always call it like grandma and grandpa’s house), where it’s like the previous owners, it may be original, but it’s in really good condition. And those are the flips that I’ve always seen work the best. I mean, I don’t necessarily mean that it has to be in really good condition. But I mean, if it’s been like completely destroyed over like 40 or 50 years, and the proper updates haven’t been made at all, like if there’s any issues, those the ones that little, you know, worry me a little more about what happens beneath the walls. But I mean, something like this, if it’s like older smoked in, I mean, not really a big issue. But you can get a lot like I mean, look at this carpet, this carpet is like original, and it’s still in really good condition too.
Harv
Right. And the other piece of that is the carpet actually flows down into some of the bathrooms as well. So that was a bonus. Oh,
Calvin Hexter
hey, look at that, that I remember that. That’s right. So there’s something weird about standing on carpet when you’re going to the washroom. I don’t know if anybody else has ever experienced that before. But it’s strange. I mean, it’s very, very strange. So yeah, good point. Other things that we liked about the property, let’s keep on going through it and add any comments you want as we walk through them.
Harv
So I guess the other piece was like you just flipped through the master bedroom there, the master bedroom was actually a really good size for older property, it actually had a little bit of a walk in closet existing. So those are some good concepts of the basement was actually we added two bedrooms to the basement. But it was actually a really good open space. It just needed a lot of work. Right. So you could tell it straight from the 70s. It’s outdated, but it was it was actually it was a solid house and it was in really good condition in terms of structural components. There was a lot of wallpaper, I remember, we this is like one of the contingencies that didn’t build in and learning lesson, a lesson learned for me on this one. It’s expensive to remove wallpaper and it’s time consuming. So for the most part, we were able to take a lot of it off. And sometimes we had to add in drywall and drywall and take pieces out and do all that work just to get it up to get it up to standard.
Calvin Hexter
Right. So for everybody that’s watching, watch out for the wallpaper because it might just break the bank a little bit. So good point. Really good point. Now remember when we walked through this property, and we were slightly concerned about the backyard, remember that?
Harv
I think so. Yeah. Yeah, I kinda remember that.
Calvin Hexter
So, one thing I know that I was cautious about is any Have you have a backyard that’s maybe on the smaller side, there could be some limitations or objections when it comes to buyers buying it in the back end. I mean, this backyard is beautiful. It has a really nice barbecue. So there’s a lot of really cool features great for entertaining. But another size thing was the one thing in the back of my head that was a little bit hesitant about that you can never change. It’s not like taken off wallpaper. It’s kind of like you can landscape it everything else like that. But I mean, in this case, you weren’t able to do any landscaping because this flip was done in the wintertime. So you actually saved a whole bunch of money on the exterior work. I mean, you we ended up you know, spraying the outside, but for any landscape related items you didn’t have to touch. Whereas if you’re flipping in the summertime, that may have been an extra $10,000 Maybe more in in making the backyard and front yard pretty Right?
Harv
Definitely. So that’s one thing, I would tell everybody out there who’s wanting to do this, that if you are doing properties, and I would say like spring, summer, even sometimes a fall market, you want to build in a budget for the landscaping. I mean, you can have a really nice house. But as soon as people go into the backyard and see that it’s not taking care of our needs a lot of work. It’s a big objection. Right. So
Calvin Hexter
absolutely, yeah. So bought this property for 345,000. That’s right. Yep. Okay. And like you said before, you always work your numbers backwards. So a lot of flippers that are like, You know what, I’m only buying under 300,000? I mean, watch this, because Hart made 49,000 on this. And it all depends on what the after repair value is. And how many times do you think we talk about the after repair value on a flip even after a purchase, or even during the purchase, we probably go back and forth maybe like 56789 10 times just to confirm the numbers and look at it from as many different angles as possible, because that ARV is probably the, in my opinion, the most important number that’s going to guide everything else, right?
Harv
For sure. And I think that’s the most that’s the biggest tip I can give people is you make them you make your money on the buy, right? And you want to make sure your comps in that area for resale, the ARV is going to be there. So like Calvin said, like we we probably go through it at least I would say seven or eight times like usually send me comps. I go through the comps, you give me approximate value. And I do my due diligence. And then even after I’m doing the when I’m doing the renovations, I will base some renovation decisions based on what’s happening in that specific area. Like in that during that month. Right. So I constantly do that.
Calvin Hexter
There was $190,000 spread between purchase price and sale price.
Harv
It’s pretty good spread. Yep. Yep. That’s a good property
Calvin Hexter
listed at 549 and sold at 535. Now, this one ended up selling I think it ended up going pending It was January written January, right.
Harv
Is actually I want to say it’s actually February. So we mid February. And few days later.
Calvin Hexter
Yeah, that’s right. Yeah. February 17. Yeah, you’re 100%? Correct. So $190,000 spread, how much money did you put into renovations
Harv
on this month. So for just the renovation costs, and I’m not considering like the closing costs, which we can talk about a little bit later on. We spent about $113,000 on renovations. So get new stucco. We did like pretty much everything new on the inside, we have new hot water tank, new furnace, we put a new garage door and was added in after these pictures were taken. We did staging and all of that stuff as well. But that’s not really construction costs.
Calvin Hexter
Hard did staging make a difference, in your opinion, when it comes
Harv
out of all the properties that we’ve done is the first time I staged a property. And in my personal opinion, it made a huge difference. Like I think we still would have got good attention. But the staging just really did up to to get so many people in there. Like we had crazy amounts of showings in the first few days, who’s just not?
Calvin Hexter
And for anybody that can’t afford or doesn’t want to afford actual staging? Because I mean, the cost of it can be I mean, do we get it back in the purchase price, I would like to say that we’ve probably got more showings because of it maybe created a little more competition. And it definitely warms up the space dramatically versus not having any furnishings. And and that’s one of the most common questions I get is, you know, do we staged your property, we not staged the property. I mean, it depends on the property. But I’m also very pro stage. And at the very least, we can always do Virtual Staging in some some cases as well, which obviously cuts the cost out considerably. I think usually Virtual Staging is about $50 a room or so. And then actual physical staging. Where you about what 2000 or so for 30 days.
Harv
Yeah, it was about I think it was about 2300 or so with everything with all in. And I really do think it made a huge difference. Like I didn’t I typically don’t budget in the staging, but I started doing it going forward. But I just had a little the market was going crazy at the time we were listing so I’m like might as well if I’m going to take a risk, now’s the time to do it.
Calvin Hexter
Yeah, yeah. I mean, beautiful renovation. Where did you get your renovation ideas from like design and everything because I get a lot of questions of like, you know what color Do we do? What flows with what like what flooring goes with what cabinets, to what? countertops? backsplash? Where did you design concepts because I mean, lots of flips now.
Harv
So I you know what, honestly, this is not my forte. And so what I was typically doing for my flips is my wife was helping out a lot. We she would go online, show me pictures of this looks good, I think these colors kind of go together well. So that’s how we’ve been doing it in the past, going forward, we’ve actually hired somebody to come in and take a look at the property with us, and give us some ideas on what colors would go together. You know, what kind of cabinets we should pick that type of thing. So I’ve been building in a budget of about seven $800 Not a huge budget, but just enough to get, like, you know, five or six hours of a designer’s time to go through
Calvin Hexter
it. Right. And I mean, the design side of things is so important, where I think you spend that, you know, 1000 or whatever it ends up being for the design assistance. And I mean, that can boost your value, in my opinion, some of the greatest having a concept that flows from the moment you enter the house, walk through each, you know, space, go into the basement, and it’s consistent, and it’s modern and trendy, like I mean, it stopped in a photo like this. Most people that renovate their bathroom, don’t think to put like shiplap in the back. Not they would never think about having a concept like this, but they see it and most people would look at this picture like that is a really nice bathroom, right. But a lot of people wouldn’t know how to design it. So these designers are literally, that’s what they do. That’s their profession. And so I truly think that you’re going to be able to save a lot of money for days on market, you’re going to be able to sell for higher by having the proper design going into these properties. And I know that’s hard. But a very common staple of yours is always like the black hardware, having like the bright like the nice white countertops, and just having it very, like refreshing and feels new. Right.
Harv
Right. And I think a lot of that is like feedback that we’ve gotten from other flips that we’ve done in the past. So we’ve we’ve done different types of colors, but we just found Okay, people really like this. Let’s stick to it. People like this. Let’s stick to it. Right. So we’ve kind of just built on our momentum over time.
Calvin Hexter
Yeah, you also finish the laundry room, I noticed that it’s 5050 for fix and flippers on finishing the laundry room.
Harv
So so in the past, I didn’t finish the laundry room. And actually, you’re the one who gave me the feedback of people really care about the laundry rooms right now. Right? So when they’re looking at flips, they go into new houses, and they say, Okay, what’s, what are we getting here? And what’s the value of going into a better neighborhood, essentially, like closer to the core. And oftentimes, people overlook the laundry room. So it’s worth it to spend a little bit of money, you get the flooring in the laundry room, put a few cabinets up, if you can, it doesn’t break the bank, but it just kind of makes it more welcoming. And people do end up spending a lot of time in the laundry room. Right. So that’s, that’s, it’s worth
Calvin Hexter
it. And we also put a wet bar in as well. That’s right, yeah. So the nice thing about a wet bar, I mean, it’s very nice to have, I get a lot of compliments on I mean, whenever we have showings, it’s always like love having the wet bar, you know, thank the flipper, thanks to renovator for adding that in there. I mean, it’s always nice that you already have plumbing as well, if you ever wanted to, I’m sure you could put a dishwasher in there. And I mean, probably wouldn’t put a you know, I guess that mini fridge is probably the biggest, but it’s a nice item to have. I mean, it’s, it’s something that’s not always expected. But sometimes when you’re when you’re flipping these properties, providing the unexpected, and adding that extra point of value to anybody that’s walking through. I mean, just just gonna add to greater weight of being able to sell the property for faster and higher. So for sure.
Harv
And I think one thing I started doing is I started walking into these houses thinking like, if I live here, what are what would I want, right? And I kind of run the numbers back and forth. Like is it worth it? Is this gonna? Is this investment going to pay off? And that’s kind of how I’ve been making those decisions? Yeah.
Calvin Hexter
I love it. Okay, why don’t we break down the numbers? We already kind of did. But let’s, let’s go through it a little bit more in depth here. So I’m
Harv
just gonna, just gonna put my, my spreadsheet up, just bear with me here. Good.
Calvin Hexter
Have are able to do horizontal instead of vertical.
Harv
It’s up better. Nope, that’s upside down. No,
Calvin Hexter
that’s okay. Okay, so let’s go through, we’re gonna go through the numbers. So we sold the property. So let’s work the numbers backwards, just like we do when it comes to a flip. So. So sale price was 535. I know that we bought the property, you bought the property before the market really started to dramatically increase. So I mean, you’re selling at a really good time as well, where I mean, if you did sell in January, the property value according to our stats would be 12%, Less 10% Less. So I mean, we also sold at a really good time, and that’s why I love you know, fix and flips and expansion markets that we’re in right now. Because I mean, you’re probably paying, you know, maybe a little bit more than what you would have paid last year. But if the market continues and I truly believe that it’s going to mean the sale price is gonna be much higher than any age. To ARV that we’re going to find so there’s a little bit of a leap of faith you have to take in markets like this. But I mean the market is, is there’s a lot of steam behind it, and it’s going very fast. So 535 sale price. Okay, so we had the renovations, you said exactly where? How much?
Harv
About 113,000? Yeah. And then we have closing costs, as well. So these are things like realtor fees, property taxes, I kind of just do my own closing fee version, right. So financing costs, property taxes, insurance, bills, all that stuff, realtor fees, and that was about 27,500.
Calvin Hexter
Okay. Okay, what are their expenses you have in there?
Harv
So that’s all in so when I adopted my renovation costs, my closing costs, that’s like, everything that’s like, me borrowing money. Everything’s Included in there.
Calvin Hexter
Gotcha. Gotcha, gotcha. And then in the end, you ended up walking away, it was like 49,000. And change, I almost put 50,000. Like how to make 50,000 profits on a on a fix and flip, but I think next project, because you have, we have two, two projects on the go right now. And one of them’s gonna be on the flip tour, that’s going to be on April 9. So if anybody hasn’t signed up for that yet, I think we only have like 15, maybe 20 spots available. For April knights flip tour. So hard, we’re going to be putting either Dugan or North Glendora, both really nice communities. But I think we’re going to decide and we’ll let everybody know, probably a week and a half, two weeks prior to which one we’re going to go. But if anybody wants to see what harvest, you know, the projects that harvest, you know, hard works with, come to the flip tour, take a look. I mean, they’re not going to be completed versions of it. But we can always probably invite anybody back to take a look at the completed version. But you can kind of take a look at you know, what’s the basic nuts and bolts that Harv looks for when it comes to the bare bones, the property. And during that flip tour, we’re going to talk about purchase price, we’re going to talk about estimated renovation budget estimated profit, estimated ARV, so you can start to get an idea of you know, what are the sticks and flippers that are being very successful in the market? What are they doing? What’s the template they look for? And how do they rinse and repeat their success? Because I mean, we’ve done a handful of flips together now. And I think every single one of them, you’ve seen a decent profit, right? Have you lost anything on any of the fix and flips that we’ve done so far?
Harv
So far? I haven’t lost anything. And I’ve actually been over 10k, even on the townhouses and stuff. So I’ve been very fortunate in that regard. But yeah, it’s good. And the fix and flip tours, I think they’re awesome, you get to network with a lot of people, like I’ve met some great people throughout there that I still keep in touch with, right, so you kind of bounce ideas off each other. And, you know, all that good stuff. And
Calvin Hexter
thank you for that your for hosting one of the properties one of the two current months, so So what some tips like what are what do you think your biggest was that what was the biggest thing that you think you’ve learned on this last project that maybe you can help any anybody else that’s going to be doing fix and flips maybe avoid going forward?
Harv
So I do like many people like to kind of look at that number and say, okay, when we’re looking at clips, I’m only going to buy under 300,000 are only going to buy under 250, that doesn’t even exist anymore, right? But you have this number that you’d want to spend too much. But I really do think it’s worth spending a little bit of extra and getting into those highly desirable neighborhoods. And it’s, I feel like the profit margins are just better and you’re getting into a little bit of less risk. So that’s my advice. From this one.
Calvin Hexter
Plus you can you can you can create, you know, you have a little bit more creative freedom on these ones that that you’re paying a little bit more for. I mean, you could spend a little bit more money on the fixtures, I mean, it’s kind of expected these nicer areas to like, I mean, even the wet bar had like nice chord, nice quartz countertops. So I mean, the end product, you know, for renovations tends to be you tend to need to put a little bit more into it to get a better return. But I find the creativeness that you can put behind it as much greater as well. So you can kind of flex some of your I mean, like when you came inside the house, you had like the really nice vertical wood slats that were right there. Just a lot of really cool things like that. I actually had a neighbor, so the neighbor that called me today on that property, she actually she was saying she saw all the movers for this staging furniture thing go in and the property. And then she remembers like a week later, they were taking all the furnishings out and she’s like, how did you sell that property so fast. They only had the furnishings in there for like a week, we can have two weeks. And I just started laughing on the phone. And I just said it was a great, it’s a great property. It was a great property and a lot of people wanted it and it sold for a really good price. So big hats off to you have any other tips that you can recommend for anybody else that’s watching that’s getting into fix and flipping,
Harv
I think Okay, so one tip I can give for this market. And this is just my personal opinion as the market because the market is so hot right now, it’s really hard to purchase properties at a good value, I think right? So you really got to be on top of it. You got to be looking all the time. You have to make sure you’re here you’re paying attention to them. Get right. One thing that we now do, that we were too scared to do before is we go in and unconditional, unconditional offers just to just to thank that property and be able to move forward. Putting conditions in, and every few are gonna put conditions and shorten them, right? Make it appealing for for the seller to pick you pick your offer versus somebody else’s. So I think that’s the biggest thing that I’m finding right now.
Calvin Hexter
And is there anything that gives you confidence going in conditional?
Harv
So, yeah, so we actually have a joint venture partner that we bring on for many of these properties. So he’s a family member. So it makes it a lot easier when you have somebody who’s kind of there financially as well. So you can put on offers and see, okay, I might get this one I might not. But if I do, I kind of have the backing to figure it out. Right. So definitely been easy for easier for us.
Calvin Hexter
And when it comes to the property itself, like, you know, because we could walk through properties, and I’ve said before, like, I just don’t feel like this is a healthy one, I wouldn’t recommend buying it because it just doesn’t feel good. Is there anything that you can recommend to those that are watching it? But when you’re walking through the property, kind of like the feel? How do you get the feel good moment, do you think to know that this probably, you know that the property is in a good condition overall.
Harv
So with this one, it was just like, when you walk through the house, it was just it just felt like a sturdy house. Right? So I mean, you’re gonna have a little bit little bit of squeaks here and there just because the houses are so old, but it just felt really sturdy. And even when he started taking walls down and started ripping things out, you could tell that it was in really good condition, it was just a solid house. So I think the vibe of just going there and just walking through it. You can you can tell right. And oftentimes people get scared of like, foundation cracks and things like that, which you definitely need to be cautious of. But there are definitely things you can just get taken care of you can build up budget into the flip piece of it, right. So that’s something that you shouldn’t just walk away from a property for that reason, you should do your research into what it’s going to cost to fix that. That issue.
Calvin Hexter
Yeah, I mean, you’ve been highly successful doing many flips and seeing a minimum profit of 10,000, which are on the townhouse flips, and then obviously much more on the single family hard what’s in store for you this year? What’s going on? What are we doing?
Harv
So we’re hoping to do my brother a lot. We’re hoping to do about six flips this year. We’re hopefully hoping also to get into more of a burr strategy for longer term. So we wanted to get a bunch of capital together and then start investing long term. So that’s kind of our goals this year.
Calvin Hexter
Fantastic. I’m excited. Well, I mean, you got to really fun projects coming up right now, one of the Northwind great community dug in, get great at to see that your your, your main beautiful family halls. And I know a lot of families are super happy and you know, happy to get into there and set the roots and make it their own. So really good job and everything you’re doing. Thanks so much for all the golden nuggets today. And appreciate your time. And if anybody wants to reach out, I mean, how do they reach you?
Harv
You know what, you can just throw my email address on there for number whatever. Even Facebook doesn’t matter, right. So I made a lot of connections through YouTube as well. So we kind of share tidbits with each other. Like I know when we talk back and forth on and give each other tips when we can. Yeah, yeah, it’s a
Calvin Hexter
good it’s a really good community so hard. Thank you so much. Thank you for your time. Thanks for sharing all this great information and looking forward to seeing what’s in store and again, if you guys want to see what what Harvey is up to flip tour, it’s going to be there. So other than that, Harv Have a good evening. Thank you again for everything, and I’m sure we’ll see very soon.
Harv
Awesome. Thank you. Appreciate it.
