Pros and Cons of the Flipping your House

CON: You could break the bank.

This "slow flip" idea I talked about last week does have its risks. For instance, we have made 23.6% progress toward paying off our home. Because we decided to buy a home that needed updating, we had to reserve cash for renovations, thrifty decorating and all of our other DIY projects to get this house in selling condition. This means initially we were not able to put as much money down on the house. Visually this is hard because we know the money is there but we will not "see" it and be able to count it towards our home payoff progress until we sell this home (or pay it off).

PRO: Money Honey

Obviously making money is considered a PRO for many reasons, but for us it would bring us one step closer to our larger goal of home ownership. Whether or not we profit from this home is somewhat of a mute point though. We have learned SO MUCH about painting, tiling, grouting, decorating, craiglisting, yard work.... the list goes on and on. We are so thankful for the opportunity to learn all of these things.

PRO/CON: 

Living in Your Project

While is it great to be in a place that is in need of rehab -- our minds are ALWAYS brimming with ideas and projects because we are so inspired by the place we do life in -- it is sometimes hard to relax in it. We especially found this to be true during the great Tile Incident of 2013. This winter Ty was working long hours, and I was knee deep in grout and working part time at the hospital. We needed home to be a place to relax and rejuvenate, but with our house in the transitional project phase this was hard to come by. Ty and I are also "project people." If you give us the option of resting or doing a project, we are going to choose the work. This made it even more difficult for us to slow down when we were at home because there seems to always be one more project to do!

                                           PRO: The Home Itself

Although even a "slow flip" is risky, we got to move from a condo into a home MUCH sooner than expected. We have loved having a yard, garage, and beautiful creek to admire each day.

PRO: Living the Dream

Renovating a home has been a dream of mine (Caroline, here) for a long time. I had no idea that I would get to do it so early on in our marriage. It has ignited my already growing passion for decorating, organizing and designing. It empowers and encourages me to be thrifty and to find easier, better ways to do home projects. It has also allowed us to start dreaming of our next home adventure....even though we still have a ways to go on this one!

So there you have it, the good, the bad, the ugly. Making a PRO/CON list helps me to zoom out and focus on the bigger long term picture. What does your PRO/CON list look like?

Flipping a House to Payoff our Home

Our journey to home ownership is a little atypical.   We purchased a home that needed "updating" because we wanted to minimize the overall financial risk that comes with simply flipping a home. (If you want to learn more about our journey to home ownership take a look here, here, and here). We wanted to find a home that was livable from the beginning. So, for instance, if I quickly discovered I just hated renovating, we still had a place to live without having to pay to make it livable. 

The challenge: Update our home on a limited cash budget spending ONLY what is necessary to raise the value of the home SO that we can ensure we make a profit when it comes time to sell.

This feels a little overwhelming at times. Like during the tile incident of 2013, we realized that we might NOT be able to do it ourselves. This is a scary thing when operating on a tight budget. If we can’t DIY it, how much does it cost to pay someone? How much does that take away from our overall profit? Will we have enough money to finish the rest of the kitchen? 

After reading stories of flippers, stories of home renovation gurus, and stories of couples just like us, we came up with a plan I like to call the art of the slow flip. 

The plan is to fix up our home using DIY home reno and thrifty spending, and then sell it for profit once we are finished. This time frame could be a year, it could be 4 years, it could be 6 months. I still get overwhelmed, terrified, nervous and excited about this plan. We are all in now, there's no turning back. And there is always the looming question of even if we are successful in updating the home, will it sell for profit? 

We are 9 months into our home “updating” and so far, so good. I do like home renovation – phew! We have managed to overhaul an entire kitchen, learned to lay tile on the floor and a backsplash, painted the entire house inside and out, decorated the living room, dining room, and guest room, and are cooking up some mean plans for the bathrooms. We still don’t know if our home will sell for profit or if all our hard work will be for naught. I guess the answer to that question will remain a mystery to us for now, but in the meantime we do plan to continue updating this home through DIY projects, careful spending, and thrifty decorating. 

 "oh, so you are flipping a house." 

Yes and No. The difference is...
1) We didn't want to be subject to the market's highs and lows when it came time to sell. We wanted to minimize risk by finding a place we could stay in long-term if necessary.

2)  We are living in our project. Most flips take place outside of the flipper's home. Flippers generally live in their own home, and "flip" another house they have purchased, and then make a profit.
For us, this is not just another house we are flipping, but our home.

3) Sometimes flipper's will have two mortgages or a construction loan - one for their home, and one for the house to be flipped. We are do have a mortgage but all of our renovation work is paid for with cash.

Is your journey to home ownership/living debt free a little less than typical?

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