Some Financials - or "How Profitable Is This Anyway"

Hubby and I discussed the course of the business a bit tonight.  Some of his realtor friends want him to start negotiating with banks on their behalf, and he will get a portion of the profit from any sales that result. They also want him to do some property management (for rentals, and housing developments, etc.).  He also wanted to discuss maybe bringing in a partner to help fund the next renovation (we have enough to fund about 2.5 projects, but not three full ones).

After much debate we figured out some of the financials.   He will make about $15,000 from the first flipper, and he could make as much as $30,000 from the second. If we estimate conservatively, at $15,000 per property, and consider that we can comfortably do 2 properties per quarter.  That is a profit of $120,000 per year (before income taxes, of course).  This does not even count the income from the rentals.  Very lucrative.  Of course, we are dependent on the realtor getting the houses sold, but it is really in his best interest to move the properties (because we won't buy a third until one in sold).  During the down times (which we might have in August) Hubby can work on the rentals, and also develop the estimating process, and start generating a list of interesting properties for the next round.  Even if we miss our estimates in a particular quarter, we should still be just fine financially.

Decision:  for right now, Hubby is going to stay focused on the flipping and rentals.  It has only been two months.  We can always re-evaluate after the first year.

In other news, we finally got the water turned on in flipper number two!  Nothing much to discuss on the rentals right now.

Finally listed!

Flipper is finally listed.  Looks fantastic!  Here is the listing with some great pictures of the property:
http://www.remax.com/property/108472628-60440123/1322-CHERRY-ST-Pottstown-PA-19464/

Bought all of the materials for the 2nd place yesterday morning.  Work has already started and because it's a townhouse there is not much to do on the exterior (we needed to fix a drain pipe - already done - and the patio might need to be relaid because it slopes too much toward the house.  Doing a minor kitchen remodel (new counter top,  new floor, maybe new appliances, but keeping the cabinets).  Need a few interior doors, but the exterior ones are already fixed and/or replace.  New furnace and AC, of course (that seems to be one of our trademarks - and helps the resell value tremendously!).

Not much news on the rentals this month - definitely a good thing! - have received rents for 5.5 out of the 6 units that are occupied.  Expecting the 2nd half of that last one on Friday this week (keep fingers crossed!).  Need to get new tenants into the place that ended up being evicted, but really happy to be rid of the old ones.  Almost giving up hope of ever seeing any of the money we are owed on that one.  The place is clean already and we may move the stove from the new flipper to this apartment, but otherwise it is good to go.  Hubby is confident it will be occupied by August 1st.  It does feel good to have the rental situation a litter calmer, at least for now.