HomeInvestmentsReal EstateI Looked at my First House for a Real Estate Investment

I Looked at my First House for a Real Estate Investment

Last week I looked at my first property for investment purposes.  I doubt I am going to get involved but it was exciting nonetheless.  The experience made me question whether I actually want to get involved in a short term flip.

Looking at my First Possible Flip

I took a look at the house with a buddy of mine and his contractor.  This particular buddy and I are very good buddies and I think we would work well together on a real estate project (however, I have stated in the past I have no clue what makes a good partner).

It is a short sale that has been vacant for the better part of 2 years.  The vacancy didn’t give me a great initial feeling but I figured what the hell if my buddy and I could get a “steal” why not.  To say I left overwhelmed is understatement.  The house was/is a disaster.

I figured there would be cosmetic problems, but the list of problems were too ridiculous for me to get involved on my first deal:

  • people had come in and stolen the copper piping from the house as well as the coils from each of the baseboard heating units
  • There was a crack in the foundation that may or may not be serious
  • No hot water heater
  • Boiler was completely busted
  • Contractor said we would have to redo most of the kitchen
  • Bathrooms were dated which may be a problem if we were to flip it (if it were a rental wouldn’t be that big of a deal)
  • The house had been sitting there for a very prolonged period of time I would be shocked if an engineer doesn’t come in and find mold

There are other problems that aren’t fixable such as being on the corner with a very busy road next to it, a boat I would somehow have to get rid of and an unknown amount of dumpsters of garbage that would have to be removed (which would provide issues in terms of renting a dumpster and actually putting in the hours to remove the rooms full of stuff).

As soon as I walked in the house I knew this project wasn’t for me.  I think my buddy might still go for it if he can raise the capital (b/c of the problems with the home it can’t qualify for a traditional mortgage).  He could make some good money, but I didn’t think my stomach could handle it.

Why I don’t Think I’ll be Flipping a Home Anytime Soon on Long Island

Talking it out with a few people I came up with a statement that is not original, but seemed to sum up my situation perfectly.  For me, flipping this type of home provided a limited gain with an unlimited downside.  

The house is going to go for $X eventually (my guess is no where above $300,000 – which is low where I live I know that is shocking for most) but the work I would have to do could be unlimited.  Concurrently, I have no idea what kind of town inspections would come after the amount of work that would be needed.

I can’t see myself flipping a home anytime soon on Long Island.  The stakes are too high and I only have access to construction services at retail cost compounding the cost issue.  It is possible that I buy a rental on Long Island, but the likelihood seems like appealing then the option of working with my brother-in-law down in Philly.



  1. While I agree that this may be a bit too much to chew, at least for your first, is it really fair to say that it would be “unlimited” work? There are a finite amount of issues and presumably fixes for all of them.

    I hope your buddy knows what he’s doing and has some kind of written estimate at what the fixing costs are going to be before jumping in.

    I love watching the Flipping Boston and Flipping Vegas shows. Your statement of limited gain for a lot of work could apply to many of the places… yet they always come out ahead in the end… often a hundred thousand for a six week investment. That said, they are television shows and done by experienced people who do it full-time. I’m not suggesting that you can duplicate what they do, but that the gains for the work do seem to match up.

    • I don’t see it as finite. What if the town comes in and says something is not to code? I doubt the builder is coming back to fix it for free! That is what I meant in terms of infinite – that could keep happening

      • Once you’ve brought that item up to code then it’s completed. While there might be a few things that aren’t up to code, there are a finite number of them and they should only have to be done once.

        I suppose you could get yourself in an infinite loop of having bad contractors unable to bring it up to code, but that’s extremely far-fetched like roulette landing on a specific number an infinite number of times.

  2. Well, it surely isn’t an endeavor for the faint of heart. Or the stupid. Or the naive. Or the guy who doesn’t have his own contracting license… 😉

    Around here sometimes people do pretty well at fix-&-flip, but I think it’s because they know what parts of town have the least risky and best deals. And sometimes because they know how to buy a shack off the courthouse steps.

    There HAS to be an easier way to make money.

    Might want to consider getting a real estate license, if you don’t already have one. Not because you want to sell, but because the course you have to take is a gold mine — the guy who taught the one I took was specifically coaching wannabe fixers-&-flippers, and even if he weren’t doing that, a lot of the information about all aspects of real estate law and marketing was really eye-opening.

    • “Or the guy who doesn’t have his own contracting license…”
      – BINGO.

      “There HAS to be an easier way to make money”
      – Working! JK. I truly believe that if there was an “easy” way to make money everyone would do it. For me, it is all about building multiple streams and I am hoping real estate is one of those streams…one day b/c the deal is dead.

      • “Or the guy who doesn’t have his own contracting license…” –
        Angie’s List is your friend. For a small amount of money you’ll be able to get someone who has been positively reviewed probably dozens of times (depending on the population). It of course is going to cost money to hire someone.

  3. I got excited when I saw your tweet (of this post) thinking you were also getting into rental real estate. I’m doing my research on that now 🙂

  4. Oops, posted too soon. I’d agree that I’d personally want a lot less work or more fairly certain profit for the amount of work that’d go into that. Granted, I tend to agree w/LM about the repairs eventually concluding, I’d not be willing to get into this particular house.


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