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You're listening to the Flip Houses Like a Girl podcast, where we educate, empower and celebrate everyday women who are facing their fears, juggling family and business, embracing their awesomeness and wholeheartedly chasing their dream of flipping houses.
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Each episode delivers honest to goodness tools, tips and strategies you can implement today to get closer to your first or next successful house flip.
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Here's your spiky haired breakfast taco loving host, house flipping coach, Debbie DeViery.
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Hey there, thanks for hanging out with us today.
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So we're going to talk with Angela, who is one of our flip sisters in the Detroit, michigan area, and we get to do a deep dive.
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On her first flip, she made an incredible 16% profit.
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So, based on the sales price, 16% of that was her profit.
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Just for reference, best practice is 10%.
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So anything above 10% is awesome, 10% is awesome.
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Anything above it is even more awesome.
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And that was on the side of her being a busy mom and having a full-time job.
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So we're going to hear issues that came up, problems she had to solve.
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It was pretty smooth sailing until she went under contract to sell and she had a surprise appraisal that almost derailed the whole thing.
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So she'll tell us how they saved the deal and the buyer got to move forward with the purchase.
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But it got a little bit tricky there and it got a little bit scary there.
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And we're also going to talk about the biggest lessons she learned.
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She shares three great lessons that are important for beginners and seasoned investors alike.
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All right, let's get into this conversation.
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You're going to love her.
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She's fantastic and we call her Angela with the Cool Kicks.
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Here we go.
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You know the drill you want to introduce yourself and let us know who you are, where you are and what you're up to in the world.
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My name is Angela and I live in Metro Detroit, just a couple suburbs outside of the city.
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I'm a mom of a sixth grade boy, first year of middle school.
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Big changes over here.
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Oh my gosh, I can't even with what happened in the sixth grade.
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It was crazy.
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It's a big change, it's a big adjustment.
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Yeah, I'm a single mom, but saying that doesn't give enough credit to his dad, because he's got a great dad.
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You know week on, week off, but yeah, I've got a child and a full-time job, so I do keep pretty busy.
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Okay, so you're working full-time.
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I am.
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Yeah, I work from home.
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I've worked from home pre-pandemic since 2013,.
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So I've been working from home for a while Since before it was a thing really.
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Yeah, what kind of work do you?
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do.
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It's a strange job unless you know about it.
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I write training programs for pharmaceutical and biotech sales reps.
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So drugs come out, big company meetings, things like that, where they get their people together, I develop training solutions for whatever they need to learn about for that session.
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I used to travel a lot for work.
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Thankfully it's every other month or so now, so it gives me more time to be home and just settled, which is now.
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Yeah, what landed you in our little bubble of flipping houses?
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So it's kind of funny.
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Well, I found myself in a week-long seminar thing through another group and, well, I enjoyed learning about the concepts.
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It was a nice high-level introduction to just things that now I realize are the basics.
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It was enough for me to understand that that was not the group for me, but that I liked the space and I was interested in learning more.
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So I did some more research.
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I found your podcast and I had actually signed up for kind of like getting to know you call with someone.
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And in the meantime I had joined my local Facebook page like local real estate investors and I had posted in there kind of asking around about local mentors et cetera.
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And Amy, who is one of our flip sisters, she responded to my post in the local group saying hey, she's not local, but Debbie DeBerry is amazing.
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And I was like that's enough, I already have this call set up.
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But yeah.
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And so, hearing that she had had such a great experience in the program and having listened to the podcast, I went into the call with the mindset that, yeah, I think this is the place for me and yeah.
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I love it Shout out to Amy, shout out.
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Amy is going to be shouted out like three times she's awesome.
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I know she's awesome.
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She's such a gem.
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We are community.
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I love our community because it just attracts like the best hearts.
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So, yeah, let's definitely give credit where credit is due.
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So okay, so that's how you found us.
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And then when let's walk, you, let's walk through the first flip.
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So you recently sold it like you recently closed I did.
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I recently closed, two weeks ago, okay, and then the next day after that I bought my second one.
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So it was a busy week for me that week.
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Look at you, that's awesome, yeah.
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So I signed up for the program and I spent the first couple of months going through the modules.
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I didn't want to like dive into anything before I was ready.
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I, you know, set a little bit of time aside every evening, started going through everything, and then I built the team.
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I started to follow the steps and I did make a couple of offers.
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I connected with wholesalers in the area.
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I started making some offers, but I actually the one that I ended up purchasing, shout out to Amy again.
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Amy called me one day.
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She said hey, I got this lead through my website.
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It's not in an area that you know I typically work in and I've got enough going on right now, but it seems really promising.
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Would you be interested?
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I'd go with you.
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So Amy and I went out, met the seller, looked at it together.
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She, you know, I don't know.
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She gave me some good tips on what it was gutted Like.
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Let's be real.
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Everything needed to be done.
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It was completely gutted, had been empty for seven years.
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It was a huge project, but I was like, yeah, this is this, is this, is it, I want this house.
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So we looked at it.
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The seller wasn't really talking to anyone else signed the papers.
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It was all done in under a week.
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Wow, it went really fast.
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Yeah, we went straight to title company.
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Went straight to the title company with the purchase agreements and met at a coffee shop, signed some papers and In a way you go yeah.
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So what was the seller situation?
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Like you said, the house had been empty.
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So did they live there?
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Or had they inherited it, or Nope.
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So what I found out?
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So I was either the third or fourth.
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I was never clear if there was three people before me or if I was the third, but it had been owned by multiple people trying to do what.
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What I did, trying to flip multiple investors, no-transcript, gotten in there and then didn't really do anything, ran into some issues, and I was the third one.
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So the seller had purchased it about two years before he did some work.
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But what I found out is and he told us this upfront he didn't pull the proper permits and when the city got kind of wind of the work he was doing, they're very strict and they made him like take down all the drywall.
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And then he got kind of frustrated with it and said I'm done with this, this is.
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It was just it felt bad to him at that point.
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He wanted to get rid of it and move on.
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So I went in there knowing the house has like a big red flag on it that I had to sign an affidavit accepting all of these violations, promising I'll correct them.
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And so when I bought it it came with a whole host of kind of issues I had to go backwards and resolve and I knew which I would have done anyways.
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But you have to be very by the book.
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Pull the permits, do everything the right way.
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Yeah, because when you get caught it's like dang it.
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Why didn't I just do that?
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It's a lot more work to untangle it.
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It is more work to untangle it, and so people are like but I don't wanna wait for the permit.
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Well, I promise you you're gonna add on more time on the backend cleaning up your violations.
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Yeah, and you don't realize too that people, especially in smaller cities too, the people in the building offices and the permitting offices, they know you're not fooling them.
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They see a house is sold a couple months apart and the listing says oh, all new electrical, all new plumbing and no permits for pull for those things.
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Guess what?
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You're gonna be in trouble.
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I've become really good friends with the women in the building department because I spent so much time there.
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She and I would always chat and find the work.
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We should just go get lunch one day.
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So we're besties now.
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I love it.
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I love it.
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That is so cool, I love that it's good to do it by the properly and not get yourself in some trouble, even if it does take a little bit more work.
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Yeah, Okay.
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So you bought it from either the third or second investor who owned it.
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Okay, got it, Okay.
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So when did you close on the purchase?
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Like October 12th somewhere around there, okay, early mid-October.
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And what was the purchase price?
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$37,000.
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$37,000.
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Okay, $37,000.
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I know, oh, inexpensive.
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It's quite a different market.
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It's not in Detroit proper, but Detroit Metro, I think, is a little bit unique to some parts of the country.
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Yeah, wow, okay.
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When you first bought it, what were you anticipating the repairs to be?
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I thought about $80,000.
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And, like I said, it was totally gutted.
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The previous investor did run Electrical and that was the one thing that he did get approved rough.
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So it had some walls up and it had rough Electrical but it needed everything else.
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It needed all new plumbing, it had no ductwork, it needed all HVAC and the Electrical ended up having some issues.
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We took down some walls, everything it needed all new siding.
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The foundation needed repairs.
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It was a big project I love that you were like, let's just do this, this is the one.
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I love it.
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I love that you weren't scared off by the fact that.
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So sometimes that's what people freak out oh, the repairs are more than the house, yes, but it doesn't matter if the numbers work.
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And I wonder if people have that mindset too, because some lenders that I talked to they won't necessarily fund if the rehabs are more than the purchase price.
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So that could be something that kind of put something in the no category for people.
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Yes, so, speaking of how did you finance it?
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I took a HELAC a home equity line of credit, out on my personal house.
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I took a $125,000 HELAC out and my intention was that I would use the HELAC for down payments, possibly rehabs.
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But with this one it was enough to cover the purchase price and the rehab, so I had like $17 left in it when I was done.
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But I funded the entire thing with the HELAC, and I'm actually doing that on the next house too.
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But I'm not going to do it forever.
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It's just working out this way the first two times.
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The beauty of it, though you can keep reusing it.
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That is the beauty of it.
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Absolutely so.
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You anticipated ADK in repairs.
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What did the repairs end up being?
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Just under $82,000.
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Oh wow, Nice.
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So pretty close yeah, and I knew I needed to kind of stay within that because I was working with my limited amount that was in the HELAC and so I knew I needed to come in right around there and luckily there was no huge.
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I think it's hard to have huge surprises when you're anticipating, doing everything Exactly.
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Exactly my point on why I like to do those.
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Yeah, yeah.
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Were there any surprises on the repair front, or was it pretty much?
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I mean, you anticipated doing everything and you did everything.
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Exactly the only thing I didn't do, which I you know, going forward, I did not do a sewer scope before, so we didn't really do an inspection.
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We knew everything had to be done and so that, always in the back of my head, I was worried that I don't know what's underground, what can't I see.
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I was worried about it, but I had it ended up not being an issue.
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Oh good.
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Yeah, we did have one later and it wasn't an issue, but that could have been like in my head.
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I knew that that could have been the only thing that would sneak up on me and maybe cause some trouble down the road.
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Yeah, especially having sat alone unused for so long.
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You never know.
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Yep, what was the contractor situation?
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Did you manage the contractor and subs, or did you have like a GC running the show, or what did that look like?
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Not really.
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So I vetted a handful at least six people.
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Some of them I just didn't get a good vibe from and I couldn't see myself working with them on such a big project for such a long time.
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I just, for whatever reason.
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No, they weren't the people.
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One guy I really liked, but he was coming in way too expensive.
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Another one couldn't start for a few months but as I was sharing this with a close friend of mine, her husband said, hey, you should reach out to this guy, brad.
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He did work in our house years ago, but I see on Facebook he's mostly working with investors and I said, ok, I'll give him a call.
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Oh, my god, like he's the best.
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He ended up being my main guy.
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I had to have specialized trades, of course, for the HVAC, electrical, plumbing, all that, but yeah, brad did everything else.
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Or, with his team, he kind of managed all the other things and he was great to work with, like super communicative, really nice guy.
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We both love Detroit sports, so we talk about basketball and football all day.
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He has a daughter in the same school with my son, although we had never crossed paths before.
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So yeah, he's wonderful and he's working on the second house.
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And yeah, I told them, I never want to work at another house without you.
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Don't get that.
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I get that.
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Yeah, you said that, I get that.
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Yeah, you've got the guys that work with him and it really went well.
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I feel like I lucked out completely.
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Nice, it generally does.
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So you did the vetting up front though.
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So I don't know that you lucked out.
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Because you did the vetting, you didn't move forward with people where your gut was like I don't, I'm not feeling right here.
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So you listened to that.
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So maybe a little bit of luck, but mostly you also vetted Instinct too.
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Instinct, vetted, yeah.
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And then with the specialized trades, what I did was on the local Facebook page.
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I don't post a lot in there, but I'm on there and I see who's active, who's doing things in a way that I kind of think, from what I know, who's doing things in a way that I would want to also do them.
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And then who do they use and who's getting the good?
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They're brutally honest in this group and so you know if someone's doing a great job and if they're not.
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So I got multiple bids but I went with people that I had kind of seen vetted in the group and their investors' friendly pricing and that kind of stuff.
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So I went with the people that I had found through the Facebook group.
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Yeah, I love those local real estate investing groups for that very reason.
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For those contractor recommendations, for lender recommendations, for whatever cabinets, whatever vendor, they're a great resource for that for sure.
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Ok, awesome, so no major surprises.
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Nice, so you bought it in October.
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What was your total timeline?
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Total timeline from purchase to sale was just over seven months and then from when we were done to when it sold, there was about a month of like closing, closing all that kind of stuff.
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It took about six months, which is what I had planned for.
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But I didn't actually think it would take that long.
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I thought we'd be done more like in February, but honestly it's probably good that we weren't.
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I think the market really did here and I know it's different everywhere it has recovered during the spring.
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I think if we had sold them if I had sold them February, it would have been a little bit, maybe a little bit tougher, I'm not sure.
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I mean, you have to say, but I think I think it was not a bad thing to wait until the spring.
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Tell me about when you listed it for sale.
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How was that feeling?
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Really exciting I did do.
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I had it staged.
00:18:29.367 --> 00:18:35.630
I wanted it staged for my own.
00:18:35.630 --> 00:18:45.821
I knew it would probably sell faster, but I also wanted to have like really pretty pictures for an actor for my own kind of like reflection on it.
00:18:45.821 --> 00:18:50.329
But yeah, so I had it staged and went on the market.
00:18:50.329 --> 00:18:51.738
I was super excited.
00:18:51.818 --> 00:18:52.924
Amy also has her license.
00:18:52.924 --> 00:18:54.635
She does.
00:18:54.635 --> 00:18:58.002
She's not like a day-to-day a real estate agent, but she has her license.
00:18:58.002 --> 00:19:05.930
So she listed it and we had 11 showings the first day and we had an open house scheduled for the weekend.