Flipping Houses With Private Money: How Stephanie Made $150K!

Here's EXACTLY How Ultimate Investor, Stephanie, Flipped Houses With Private Money (& Made Over $150K Doing It!) Check out the full story in this Ultimate Investor Program Review!

Stephanie was a successful food service entrepreneur who started flipping homes to prepare for retirement. In just under two years, she went from having zero real estate or construction experience to flipping four properties and making six figures in profit.

This is a deep dive into Stephanie’s real estate investing journey — from beginner mistakes to big wins. You’ll learn how she went from failed wholesale deals to profitable fix-and-flips, what she did right, what she’d do differently, and the exact strategies she used to find, fund, renovate, and sell her deals.

👷‍♀️ What You’ll Learn From Stephanie in This Video:

- How Stephanie made $40,000 on her first house flip

- How long project timelines can kill your profit — and what to do about it

- The real cost of permits and why she now pulls them herself

- Why she stopped using general contractors and started managing subs directly

- Her numbers: purchase price, renovation costs, sale price, and projected profits

- The planning and permitting problems that almost derailed her fourth flip

- How Stephanie overcame roadblocks using networking and flexible problem-solving

- How the Real Estate Skills community helped her scale faster with less risk!

Stephanie's story proves that anyone can succeed in real estate investing with the right mindset, community, and training. She didn’t start with a background in real estate. She didn’t have construction experience. But she made the smart move of investing in herself and leveraging the tools and support from Real Estate Skills to grow fast.

⚠️ Lessons From the Field - Be cautious about scope creep — extra features and upgrades eat into profit - Don’t rely on one contractor for every project - Always double-check permit requirements and ownership issues when using LLCs - Time is money — every delay adds to your holding costs - Learn to manage your own project or risk losing control

💡Real Estate Investing Isn’t Easy — But It’s Simple When You Have a Proven Plan Stephanie credits much of her success to the training and support she received from the Real Estate Skills community! The program taught her how to spot deals, analyze them correctly, manage renovations, and sell for maximum ROI. But more importantly, it gave her the confidence to keep moving forward — even when deals didn’t go perfectly.

If you want to learn EXACTLY how to start flipping houses in Minnesota visit: How To Flip Houses In Minnesota: 15-Step Home Renovation Guide

*For in-depth training on real estate investing, Real Estate Skills offers extensive courses to get you ready to make your first investment! Attend our FREE Training and gain insider knowledge, expert strategies, and essential skills to make the most of every real estate opportunity that comes your way!

--- VIDEO TRANSCRIPTION ---

Ryan Zomorodi (00:00):
Many real estate investors are sitting on the sidelines waiting for market conditions to improve or just for a better time to invest in real estate. And as a result, they're missing out on a lot of opportunities. While at the same time, Real Estate Skills students are taking action, closing deals, and making money. I'm very excited to have one of those students here with me today. Stephanie, share her journey of closing, not one but four, fix and flip properties. Since joining our program over the last year and a half, Stephanie is a small business owner in the food service industry who's been operating her business for over 20 years, but was looking for something to help better prepare herself for retirement. I'm so excited to have her on to learn more about her journey and get into some of the details of these properties that she purchased, renovated, and made look like absolute designer houses and then successfully exited them. In this video, we'll be getting into the details of these flip deals, like the numbers, the lessons learned, and the outcomes of all of these projects. For those of you who don't know me yet, I'm Ryan Zomorodi, investor and co-founder of RealEstateSkills.com. Get ready to be inspired today as we hear from an investor who thought about going all in on real estate and is now living and breathing it. First off, thank you, Stephanie, for coming back on our channel. How are you doing today?

Stephanie (01:07):
I'm doing great. Happy to be here. Happy to just chat and share what I can with anyone who is looking for a little inspiration to keep going down the road.

Ryan Zomorodi (01:18):
Absolutely. Yeah, we really appreciate your time. I know you're a busy gal. It's taking a little bit to line up this meeting for us, so can't thank you enough for taking the time. First off, let's just run it back and recap what were you doing before joining Real Estate Skills and what kind of drew you to real estate in the first place?

Stephanie (01:36):
Sure. So my professional career has for many years been in the food service world. I own a, it's a medium-sized, I guess, small business. It's a meal service company, have been doing it for over 20 years, like you mentioned, and am going to be exiting that business within the next couple of years. So I'm not ready to retire, unfortunately, financially or otherwise yet. So I think I got back into looking into real estate opportunities to see what I could make happen after my actual source of income from my business is gone. So years ago I had just sort of by accident, purchased a vacation home across the country. So I was living in Minneapolis at the time, and I went on vacation in Key West Florida, decided I should buy a little condo there as a vacation home, and then I turned it into a short-term rental. This is far before Airbnb was a thing.

(02:43):
I didn't really know what I was doing, I just did it. I'm like, okay, well, I'm going to rent it out when I'm not around. Perfect. Kept it for a bunch of years, sold it, and it did very well for me. But anyway, I sold it maybe 15 years later or so, and that was probably in about 2015, and that's when all of a sudden Airbnb and VRBO and everybody became this huge industry, and I had already exited. So I didn't do anything with real estate for a number of years. And then a couple of years ago, about three years ago now, I started to dabble in it a little bit more, and I did purchase a few new vacation rentals in markets that are highly dependent on tourism. Those are operating as short-term rentals now, and everything's fine, except that I depleted all of my funds to make down payments on those properties.

(03:46):
And so that's the long and short of how I got back to Real Estate Skills I needed to learn. I decided I needed to learn wholesaling because I really wanted to make some quick money. I didn't have any interest in flipping anything like that. I just wanted to learn how to wholesale so I could make some money and replenish my coffers, if you will. And so that's when I found you guys. I went through the training, eyes lit up a whole new world, opened for me, worked really hard at it while still managing my business for about six months, and I never quite got a wholesale deal across the finish line, and I had a property on a contract that I thought was going to be my first wholesale deal, couldn't make it happen. And I just, long story short said, screw it. I'm going to flip it myself. And that was my first flip. And so I've decided that the flipping area is where I think for me, it makes more sense. I like the challenge. I like it a lot. And so that's what I've been focusing on since of course, if a wholesale deal happened to work in the meantime, I would of course pursue that. But my focus has really been on flips since then.

Ryan Zomorodi (05:07):
Yeah, absolutely. It sounds like you're kind of like an accidental fix and flipper. A

Stephanie (05:11):
Hundred percent. I had no desire, none to do any sort of flipping, none and no knowledge about it either zero other than what I've learned through Real Estate Skills. But as far as the actual repair part of the equation, zero knowledge.

Ryan Zomorodi (05:30):
Yeah. Well, I commend you for, it sounds like you had purchased several properties without having a lot of experience or really a roadmap, and the first one you let go. I'm sure you wish you kind of kept that, but it still did well for you. And then as that short-term rental industry grew, there's more management companies, there's more infrastructure to make it easier. It sounds like you just got back in the game, but really every investor faces you can only buy so many properties until you deplete your savings and your investment capital. So now you're looking for ways to create an active income in real estate while working in your business, I assume, right? You're still working in growing the business. -

Stephanie (06:15):
I have about two more years, so I'm very actively involved in that as well. But I do have some flexibility, obviously as a self-employed person, so I do get to spend a fair amount of my time in the real estate world as well.

Ryan Zomorodi (06:29):
Yeah. Well, I mean, it's amazing to have a business for as long as you had. You're obviously doing something right. Most businesses fail after the first five years, even if they make it that far. So what was it about the business or just maybe the industry that maybe you weren't getting out of that you had to look elsewhere outside of the success you've had as a small business owner

Stephanie (06:56):
Primarily? So my food service business I own with a business partner and just we have both for years just said, at some point we're going to decide when we're both ready to be done, and that's going to be our exit date. And so that's what's happening. We're just literally coming to our agreed upon exit date. We're kind of old, been doing it for a long time. It is just time to do something different.

Ryan Zomorodi (07:24):
Absolutely. Yeah. So you're looking for, I know you've called it your encore career, like, Hey, I'm planning to exit this career, and so what's next? And so it sounds like, yeah, real estate's been that thing, hundred percent. And so yeah, you mentioned going into the active side of real estate, not wanting to touch, fix and flips. Were there any other reasons besides just not having the know-how, didn't really want to swing the hammers and get your hands dirty in these deals? Or what was it about fix and flip side?

Stephanie (07:55):
Yeah, I mean, all the things. I didn't know anything about the flipping the construction world, the remodeling world, and I just not a big fan of doing my own household improvements. I just want to hire someone to do it and call it a day. But then when I started learning through Real Estate Skills and then through my local real estate investment association, how I could partner with contractors who will be the smart people and do all those things, I was like, okay, maybe I can make it work. Let's just try it and see what happens. So I went into that first flip, not having a clue. I trusted the general contractor that I ended up selecting and using. I just put my trust in him, and he was also an investor, had done numerous flips himself, so he knew what would be worth spending the money on, what wouldn't be worth it. He helped guide me through all of that, and it turned out to be perfect. It's just what I needed. I learned what I needed. Well, no, I didn't learn everything I needed to learn. I learned a lot in that first flip, and even before it hit the market, I knew I was looking for my next one.

Ryan Zomorodi (09:24):
Yeah. Did you make that partner, or sorry, did you make that contractor a partner in the deal, or did you just find one that understood investing and could kind of speak the same language of what you're doing?

Stephanie (09:34):
Yeah, exactly. I was a little too reluctant to go into a partnership. I don't know, I'm a covering my butt kind of gal, so if it's someone I don't know very well, I just really rather take it on myself. I'm sure I paid him a little more than I probably could have if I made a different deal, but for me at the moment, it was the right deal.

Ryan Zomorodi (10:00):
Absolutely. Yeah. When it comes to contractors, cheap doesn't always mean the best. It doesn't mean you should go with the cheapest bid that you get. So it's interesting to hear that you say that. So yeah, before we kind of dive into some of these deals, just higher level, how many deals have you completed? What does your portfolio look like today and are you still living in Florida, and where are some of the deals that you're doing?

Stephanie (10:26):
So I have lived in between Key West Florida and Minneapolis, Minnesota for 20 years-ish. And so my business, my primary business is located in Minneapolis, and I come and go and I come and go, and I come and go all the time. So when I am in Minneapolis, that's where I've actually been doing my flips because I have more time, I have more spare time, I guess when I'm, and I'm sitting in Minneapolis right now. I have more spare time when I'm here. And I also, because I was born and raised here, I just know the market a lot better, understand the neighborhoods a lot better. So it's all been in Minneapolis. I do have a vacation rental property in Florida, but other than that, just my primary home.

Ryan Zomorodi (11:14):
Yeah, makes sense. So you're in Minneapolis part-time in Florida. So when you're in Minneapolis, the area we always recommend starting in your backyard, you have that local advantage.

Stephanie (11:24):
Yeah, you guys taught me that. Totally. Yeah.

Ryan Zomorodi (11:26):
So it's cool because now you're able to go into these markets. Some of the flips are in cities that I've never even heard of. So these areas where the growth is the opportunity is, and so I love to see you leveraging your experience, right? Because something that I think people forget is we come into this business with experience. It's all about real estate, it's about locations. That's the number one rule in real estate. So that gives us advantage over out-of-state investors or long distance investors just because we know those areas a little bit better whenever we grew up in an area. So

(12:04):
That's amazing. So your first flip, right? It was a property you got under contract, you found it on the MLS, and you put it under contract. We're expecting to wholesale it. That didn't necessarily work out. Your buyers were getting cold feet, didn't want it, but unlike a lot of other wholesalers who'd say, oh, well, I'm just going to cancel the contract. I don't want to pursue this. That's my only exit strategy. You decided to be resourceful and committed to the deal, and you said, Hey, look, why don't I do it? I know this is a good deal. I see the numbers, I know the rehab budget and the ARV, so I know there's a profit margin at the end of the day. So you actually took it down, purchased it, went through the learning lessons, and if I recall, when you went to resell it, it went pending in just a few days and ultimately, yeah, 24 hours.

Stephanie (12:54):
Yeah, all of that is exactly correct. With one exception, it was an off market deal, but it only came to me through a realtor that I had already worked with and submitted other offers from the MLS on. So that networking thing that you guys are so brilliant to emphasize with your students, the more contacts you make, the more offers you make, the more you're involved in your area, that's when things start to happen. And so that's exactly what happened here.

Ryan Zomorodi (13:30):
Awesome. Yeah, we always like to say on market leads to off market. It's the fact that you're out there networking, putting your name out there, putting your business out there, that the deals started to come to you. So love that's how you found this deal. So how much did you purchase it for, if you recall? And then how much did you ultimately sell for?

Stephanie (13:50):
So I bought it for 180, I believe it might've been 182, but roughly 180. I put in about 102,000 in repairs and sold it for 380. So it was a hundred year old house was really dilapidated. And the biggest thing, I think the biggest reason that I was able to make a decent amount of money is because there was a three season porch that I just turned into a four season porch, and I added square footage just by doing that. So I literally just added some baseboard heat, insulated the walls and made it look nice and pretty, and I had 200 extra square feet. So that really helped with the value.

Ryan Zomorodi (14:40):
Every additional square footage can add a lot of value. When you're talking three, four, $500 a square foot of value for a renovated home, every additional 50, a hundred, 200 square feet you can add, it can increase the value significantly. So it's really cool that you were able to implement that and capitalize on it. So yeah, that's an amazing first deal. And then,

Stephanie (15:06):
I mean I made about 40 grand and I didn't really think that I was going to, I thought I might make 10. I mean, of course you start out thinking rosy, but by the end of the project, and it was my first project, my mindset was, well, as long as I at least break even, this is a great learning curve for me or a great learning experience, and I thought I was going to make 10 grand, but when we listed it, it went in multiple offers for higher than list price, so I ended up making 40. So for me, I was happy with that.

Ryan Zomorodi (15:39):
Absolutely. Yeah. If you have the expectation of getting through this property, you're going to learn a lot, transfer it to the next one, and that's where you're going to make your money. I mean, you came out very nice on this property, this first flip, so I'm sure just icing on the cake.

Stephanie (15:54):
Yeah, totally. And to be honest, I did better on the first flip than the second or the third, but the fourth, that's going to be really good.

Ryan Zomorodi (16:02):
Well, yeah. So that first one kind of kicked it off. So this second flip, this is the one that was literally next door to your first flip, is that right?

Stephanie (16:11):
Yeah, exactly. Literally next door. So the whole time we were working, and I wasn't working, but I would visit the property often and do walkthroughs with contractor, but I'd be looking out the window at this really nasty, ugly home next door that was vacant and had been vacant for I don't know how many years prior. The gentleman that lived there, had passed away and it was sitting there in a trust in the adult son's name. I just kind of chased him down and said, Hey, I want to buy your house. I'll help you. It seems like you might not. There's a lot of work to be done, and it was really, really bad, and it took a number of months and a lot of handholding. But I did end up buying that house for $85,000, and it's the exact footprint of the house next door.

(17:06):
It needed a ton of work, a ton of work, everything new. Basically, I ended up selling it for the exact same $380,000 as the house next door without that extra square footage because I didn't have it. So I had a couple hundred less square feet in this house, but ended up selling it for the same price. Ultimately at the end, I ended up making a little bit less. On this one, I made $35,000. Not super happy about that, but a lot of lessons learned, one of which is the time, the time that it takes is everything. And this one was supposed to take 16 weeks, it took 32 weeks, and that just ate up a ton of my profit.

Ryan Zomorodi (18:01):
Oh, wow. Yeah. Time is money in this business, especially when you're borrowing money, I imagine you're using hard money or private money, you're paying over 10% typically on the borrowed funds, and that can add up very quickly. So every day is hundreds of dollars in interest that we're paying to property taxes, holding costs. So how did the time go to 32 months or 32 weeks? Is it just because it was a full gut rehab or just a scope of work? Scope creep?

Stephanie (18:28):
So yeah, scope of work, I mean, for what needed to be done, 16 should have been enough. We ran into some really long delays with the city for permits longest of which was we had to demolish the old garage completely and do a brand new rebuild on a detached garage, and that took months. It was just ridiculous. Secondly, the contractor that I used was the same contractor I used on the previous house, and at the same time, we haven't gotten to this yet. I acquired the third flip, and I made the mistake of hiring this contractor to run both projects at the same time, and that was not smart, even though he convinced me that it'll all be great, no, but I shouldn't have done it. He should have never said he could do it. It took a lot longer than it should have for both the second flip and the third flip. For that reason,

Ryan Zomorodi (19:30):
It's a very interesting point, and I'd love to unpack that a little bit. This could be a huge learning lesson for people who are getting into multiple flips, and it sounds efficient. It sounds a lot easier to hire that same contractor to run multiple projects, but it obviously takes a certain level of organization and resource management to be able to handle those things, right? There's a certain timeline of how each part of the flip should go, each part of the renovation. So yeah, I'd love to unpack that. What do you think went south when you hired the same contractor for both flips?

Stephanie (20:04):
Exactly what you just kind of pinpointed? I just don't think, think in his mind it was all going to be fine, but when he ran into delays with one of the city cities for permits, I think he didn't know what to do with his teams crews, and I think he took on other projects to keep them busy, not at the same time having my other flip over here. I just think it screwed him up. He didn't know how to handle it, and we ended up paying a lot of money for the extra hold time.

Ryan Zomorodi (20:41):
Gotcha. So yeah, it seems like he kind of dragged his feet getting certain things done. His crews are over here when they should be on your project.

Stephanie (20:49):
Yep, yep. Exactly, exactly. And again, like you said, it's a lesson. It's a lesson for me. I think it was a lesson for him too. He's a good guy. He wasn't trying to be shady and lazy, but just he was overwhelmed. And at that point, I was already in this deep with both projects. I didn't really feel like I could or should make a change at that point. The contracts were signed, I don't know, maybe I should have in hindsight, but I didn't. And so both projects took one took 32 weeks, and the other one took 28 weeks, and they were both supposed to take 16.

Ryan Zomorodi (21:31):
Got it. What was your budget on the second flip that needed everything?

Stephanie (21:35):
The original repair bid was 170. I ended up having to spend 2 0 5, and that also was a lesson learned for both myself and the general contractor. He gave me some incorrect advice about what we're going to have to do for electrical when he gave me the original bid, and turns out we had to do way more. We had to do some additional foundation repairs that he thought were going to be not that big of a deal, things like that. So he didn't get those items bid out officially. He just gave me what he thought the bids were going to be from subcontractors, and he turned out to be wrong on a couple of 'em. Anyway, it was supposed to be 170. It ended up being 2 0 5.

Ryan Zomorodi (22:28):
Got it. How do you think there would've been a way to avoid that in the future, having your general go out and actually get those bids, do you think if he did that, it would've at least at the right expectation upfront?

Stephanie (22:39):
A hundred percent. Yep. Yep. And that when I am now in my fourth project, I'm approaching it in an entirely different way. I'm actually getting those bids myself. I'm not obviously a contractor, but I am managing the project instead of letting someone else manage the project. And wow, it's night and day. It takes time. And if you're trying to scale a business, it's not ideal to spend this much time in the weeds like that, but that's because of what happened the last couple times. That's what I'm doing now.

Ryan Zomorodi (23:16):
Absolutely. No one's going to manage your investment, your property, your business, like the owner, like yourself. So I think, yeah, it's easy to get caught in the idea of delegating everything and just being at the top, but I think there are times where it does make sense and it will pay dividends to roll up your sleeves and get involved in the project and just make sure that the outcome is the way that you want. And especially when there's so much on the line, every day is costing. So yeah, I don't think it's wrong to get more involved in these projects.

Stephanie (23:50):
And I think for me being so new at all this, getting more involved in this project and the bid process and everything, I'm making better connections with the subcontractors that I will know who to go to for future. And when I just had the gc, I was relying on him and his relationships, and so that's all fine and dandy, but when the rubber meets the road, he probably didn't, he didn't go get bids for these. He just went to the guys that he normally goes to. And that I'm sure turned out not to be the most affordable or the best choice.

Ryan Zomorodi (24:33):
Absolutely. And you also mentioned getting permits as well. Sometimes the city can be a big bottleneck and drag their feet. So I do know some house flippers that don't get permits. So I think especially if you're working on very old properties with outdated systems. So I think those would probably be required to do the kind of level of renovation that you're doing. So I'm just curious, your experience with pulling the permits, the cost as well as how long it took to actually get the approved plans from the city that you're working with.

Stephanie (25:08):
Sure. So the first flip, and this is something I'm learning too, the first flip when this GC bid the project for me, he gave me a flat fee. He said, permits are going to be 1800 bucks. I can't remember what the number was. I'm like, okay, or I think it was a lot less than that. It might've been like a thousand dollars. And I said, okay, great. And that's the last I heard of it. I never had to get involved in anything and whatever. The second time, the second house he bid on, he bid, okay, the permit fee is 800 bucks plus whatever the city charges. So in other words, he was charging me for him, applying for the permit and stuff, and then I was going to pay the city, city actual fee, which I was like, okay, fine. What's that going to be another a hundred bucks?

(26:02):
I knew it was going to be more than that, but turns out, yeah, no, it's huge because it's a percentage of your rental budget basically. So the permits at that house ended up costing me like $3,500, and I thought it was going to be like 1500. So that's been an interesting one, a learning lesson. And then at this fourth flip, another lesson learned, I was going to pull the permits myself as the homeowner and then hire all the subcontractors underneath. I unfortunately found out that the city wouldn't grant me a permit because I'd purchased the home under my LLC and not under my personal name,

(26:49):
Which I knew some cities had that rule, but in this particular city, I thought it was going to be free and clear. So that was a little bit of a panic, and I ended up finding another general contractor that was willing to, that a friend of a friend kind of was willing to pull the permits for me. I'm just going to pay him a little fee. He's going to come and look at the work before we call for inspections. But I figured out a way around it, and going directly to the city allowed me to be more selective in the value that I place on the job so that when they charge me the percentage, it wouldn't be so ugly. So anyway, lots of learning, lots of learning. As you once said to me, Ryan, you're a professional problem solver. That's how I feel every day, something new tossed at you and you figure out how to deal with it.

Ryan Zomorodi (27:49):
Definitely. Sometimes I call us firefighters. They're always putting out fires in situations like this.

(27:56):
Yeah, well, that's amazing. You're definitely a problem solver. And you got to think on your feet, got to be on your toes and get creative, resourceful, and figure things out day by day. Every project's different. As you saw, even flipping the house next door at a significantly different rehab budget, just the condition that these properties are in can be very different. So it seems like you were able to adapt and sure you didn't make as much as you wanted on that property, but you were still able to acquire the property without having to spend any money on marketing. So basically everything you'd make after that didn't have to replenish marketing budget, which is fantastic. And you still did come out profitable, right? $35,000 is still more than I know some investors minimum is to actually do a deal. So I think it's still a very respectable profit. I'm sure the amount of work you put in, you probably deserved a lot more. It sounds like just from managing that big of a rehab, but you're learning so much and now you're rolling that learning into the next one and the next one.

Stephanie (29:02):
That's exactly how I'm looking at it. And each, as I roll through these, I pull things that I learned from the previous one, and it is going to keep getting better. I know it is.

Ryan Zomorodi (29:14):
Absolutely. Yeah. With the connections you're making, the experience you have, it certainly will. And you mentioned your third one. Let's talk a little bit about that. And by the way, I'd love to show some photos of the finished product because I've just got to say every home that you've showed us that you've renovated, which looks absolutely phenomenal, it's in a magazine and they're all a little bit different too. And I remember this one in particular, your third flip just had some amazing finishes. The bathrooms were really beautiful, so I really commend you for the design element to it, and it's no surprise that they've been selling quickly and over asking price.

Stephanie (29:53):
Thanks. Thanks. Yeah. The third one was an on market MLS listing, and it was in a suburb of Minneapolis. It's a pretty affluent suburb, but the particular neighborhood that it was in is more of a conservatively affluent suburb. Anyway, the houses are all built in around mid-century. This one I think was built in the fifties, and it was a lovely elderly couple that lived there for 50 or 60 years and hadn't really touched it, but it was in great shape. But design wise, decor wise, it was very outdated. So that one is the one I had the most fun with, to be honest, because I got to do some fun design stuff. I didn't make the most money on it, but again, that comes down to how long the project stretched out, which stinks, but whatever. Anyway, this one, we also added square footage. I finished the basement at this one, which in Minneapolis and Minnesota basements are everywhere.

(31:05):
The newer homes and the renovated homes people take advantage of, and they finish out those basements, but didn't use to be that way. So there's a lot of houses here that have potential down in the dungeon. But yeah, we finished it out, threw in some egress windows, so it feels like very light and airy, doesn't feel like a basement, and gained almost a thousand square feet by doing that Livable, usable square feet, opened up a couple walls to make the kitchen and living room areas more of an open concept. And then from there, I really just tried to find some beautiful finishes that made the house feel upscale. But truly I was very budget conscious, and because of the neighborhood that it was in, I was able to set the or ARV. I knew it could be closer to 700 grand, so I bought it for 4 20, 4 21. I put in about 1 35, added that square footage and sold it for 7 0 5. And you'd think, oh, that sounds like a really big spread. I still only made 35 grand, but again, the time that I had to pay the interest on those loans, it really sucks the profit.

Ryan Zomorodi (32:25):
Totally, totally. Well, yeah, I mean, if you look at the spread, I'm looking at the listing here. It was listed for $400,000 originally on the market. You purchased it above asking price at 421,000. So we always like to say the asking price doesn't necessarily equate to value or what we want to pay as investors. We have to run the numbers to ultimately determine what can we afford to pay. So you paid above asking price for 21, and then we're able to sell it for 7.05, right, which is 280 something thousand dollars in gross margin. Your rehab, you said was 120.

Stephanie (33:06):
It's about 1 35, give or take

Ryan Zomorodi (33:07):
135.

Stephanie (33:08):
Yep.

Ryan Zomorodi (33:09):
Okay. And then with the interest payments, it kind of eats away at that gross margin. How did you fund it? Was it a hard money lender, and how much did you put down on it?

Stephanie (33:21):
Okay, so this one was the first deal that I did that I actually had to get private money in addition to hard money for gap funding because I did not have any down payment myself. I already had that previous one under contract, and I was working on it at the same time. So that is also why this one cost me a lot more to hold. So I have a great hard money lender local here that I really, really like to work with, and they connected. I said, look, I have this deal. I want to make it happen. What are my options? I can't come up with the down payment. And they connected me with several private money lenders that they do deals with, they don't do deals with, but they have worked with a bunch of times on their own funded projects. And so I talked to a few of those and I ended up going with one guy. The private money is more expensive than the hard money even in this case. So it cost me a lot to hold that property for all those extra weeks for sure. But that's the only way I could make it happen. If I didn't go that route, I wouldn't have been able to do the deal on this one. So happy that I did.

Ryan Zomorodi (34:36):
So a lot of people ask, how do you flip a house without any money out of pocket? So this is exactly one way you can do so where you have a hard money lender who puts up, let's say 80% of the project cost, and then you find a private money lender who puts up the rest, right? They'll basically cover the down payment and then any out-of-pocket costs and then kind of carries you through the project, but then you ultimately are paying two different lenders. So I've structured the same kind of thing in ways where you could either pay interest to the private money lender or even split profits with the private money lender. I've done that as well, where you're not paying interest, but anything left over you split 50 50 or 30 70, whatever that might be. So yeah, it sounds like the deal itself, I mean, I commend you.

(35:22):
It looks like the numbers are great. It's close to 150,000 in profit before financing costs. So technically if you were paying all cash, there'd be over six figure profit, but then you're still able to get into this deal a lot out of pocket. So it's that tradeoff between do I do the deal and I could do multiple deals without having to put up my own capital, which is what a lot of investors do or do you just wait and do one at a time and keep more of that profit? But if you run the numbers every time, you can overall make more by doing more deals. It's just a little bit more work more to manage. So that's amazing that you're able to put all that together and be resourceful and network to ultimately find lenders to cover up the entire investment. That's amazing.

Stephanie (36:12):
And to be honest, this one was, I'll call it almost an accident too. I mean, I put my offer in on this property and I just knew it was undervalued. I knew because of the neighborhood it was going to sell for way more. So I put in my offer, we did an escalation clause and I maxed mine out at the 4 21. I never honestly, in a million years thought I was going to get the deal. And so when I did get the deal, I'm like, okay, well, I'm doing it.

Ryan Zomorodi (36:43):
Yeah. That's amazing. What did you say was your take home after paying all the lenders and

Stephanie (36:47):
Yeah, it wasn't that great. It was only 35 grand. Again, it was about the same as the second one I was doing at the same time. But again, it was a learning curve for me too because this one, I got to do a more upscale property, and I learned that I can do it and it will sell, and it's more experience, and I sound like I'm like, oh, I only made 35,000. It sucks. I'm happy. I'm happy with, of course I would've liked to make more, but it's progress for me.

Ryan Zomorodi (37:26):
Totally. And I think the thing that you should be confident about is that once you're in a position to not have to have that second lender, now you're making all that profit yourself.

Stephanie (37:35):
Yes,

Ryan Zomorodi (37:36):
Exactly. So it's just the trade off between borrowing someone's money and asking someone else to get in on the deal, versus eventually you're going to put yourself in the position after you do some more of these where you're not going to lead that other lender or you're going to be able to negotiate better to be able to have them take less of the deal. And then maybe you'll find,

Stephanie (37:57):
Sorry, go ahead.

Ryan Zomorodi (37:58):
Maybe you'll find a private money lender that'll put up all of the funds for relatively lower cost of capital than when you put together two individual lenders. Because the second private money lender, they are in a riskier position being that second position. So in theory, they should be charging a higher rate because their capital is less protected than the first lien holder, which is the hard money lender.

Stephanie (38:20):
Correct. But all of this is connecting me with other lending resources as well. So the company that I said, I really enjoy working with this hard money lender that's local, just so happens that the gal that I have worked with on a couple of these deals just left there and is standing up her own private money situation in town as well. So I'll be able to connect with her directly maybe doing a deal just with the private instead of the hard. So we'll see. But again, the network keeps growing and you get more opportunity and you learn more, and I still feel like I'm on the springboard and ready to take off.

Ryan Zomorodi (39:08):
I feel that too. And you're gaining a track record, which is so important when you're raising capital and you're networking, bringing new investors, talking to new contractors, so you're in a position that you're going to just continue to build that momentum, continue to snowball, just building on that track record. Yeah, I hope so. It's very exciting. So flip number four, I know you acquired that relatively recently. This was one that wasn't an easy one to acquire. I know we had talked about back and forth in the community and we are rooting for you the whole time. There's an interesting way that you acquired it from a city, but hey, congratulations, you bought that deal and sounds like this one is going to be one of the better ones from what you're saying.

Stephanie (39:55):
I think so, yeah. Thank you very much for helping me navigate that. You and Peter both. So this one, yeah, this was an interesting property. It was also an MLS listing. It was owned by the city of Hopkins, which is a suburb of Minneapolis as well. The city had only owned it for like three months, and I wasn't sure what the whole deal was. I did a deep dive to figure out what had gone on, but long story short, a guy purchased it a few years ago, tried to make it into a, well, he did. He ran it as a group home, sober house, if you will, had four tenants in it, but there were nine bedrooms, and so he tried to make it, he had to go get some city ordinance changed to be able to allow nine non-related people to live in this residential neighborhood under one roof.

(40:50):
The city declined to do so based on a bunch of neighbor who feedback, and then the guy sued the city. Long, long story, city settled with him by buying that house from him for a ridiculous amount of money, and then they put it on the market for much lower, and I got it. As you remember, there were some other turns and twists in there too. But anyway, I got the house. It's large by far, the largest house I've dealt with so far, and it is also in a very affluent neighborhood. So my ARV, I have a lot of room to work here. I bought it for four 80. I will sell it in the ballpark of 900. I will spend 220. I think it's going to go for more than 900. I will spend 220 on it, and at a minimum I will pull 75 grand out of this house. I'm a hundred percent confident this time.

Ryan Zomorodi (41:54):
That's fantastic. Buying a property for 480 with a $900,000 ARV with some upside is pretty incredible.

Stephanie (42:03):
It's a huge project. We're doing a ton of work, but this time I cut out that other general contractor, like I said, and I'm holding it a little closer and able to manage every penny a lot more closely than I was able to with the previous deals. So a lot more confident on how it's going to turn out.

Ryan Zomorodi (42:23):
Definitely. So there's no general contractor on it. You're going to act as a general, you're subbing it out, you have a timeline. That's amazing.

Stephanie (42:29):
Yeah, exactly. Yep. That's just plus passed our rough in plumbing yesterday, so we're moving along.

Ryan Zomorodi (42:35):
There we go. Yeah, you're moving.

Stephanie (42:37):
Yeah.

Ryan Zomorodi (42:38):
That's exciting.

Stephanie (42:39):
Yeah.

Ryan Zomorodi (42:39):
Interesting project. Yeah, large home, nine bedrooms, nine, 10 bedrooms, and you mentioned part of the plan is to turn it back into a five bedroom so it conforms more to the neighborhood, conforms to what the city's requiring, and it's just a little bit more of a sellable asset when you have five bedrooms versus nine or more than that, A little bit hard to maintain.

Stephanie (43:02):
And we're, it'll be a 5, 4, 5 bedroom, four bath. We're going to do two master suites, one on the main level and then a second one on the upper level. And then I am finishing not all of the basement, but about 500 square feet of the basement into just another living area, family room or whatever. Mostly because the comps in the neighborhood show that I can get upwards of 900 if I do that, but if I keep it at the same square footage I have now, I'd probably be looking more around eight. So it totally makes sense to do. Yeah, it's a fun project. It's going to be, like I said, by far the largest one I've done so far.

Ryan Zomorodi (43:50):
Definitely. You started with smaller houses, now you're in a very large house, so are you kind of funding it the same way, same private money lender doing the two tier approach with the

Stephanie (44:01):
Lending? Yeah, unfortunately I am on this one. This one came up before the other two were fully closed and everything, so I'm in the same position, but I'm confident on the timeline on this one. It's 16 weeks out the door and it's going to happen.

Ryan Zomorodi (44:18):
Yeah, I believe it. That's super exciting. Stephanie, you've posted in our group, you're a buyer, you're actively looking. So I love when you do that because people know that they can wholesale deals to you, they can provide deals to you, and you're actively looking. I always like to ask our cash buyers. I recommend our students ask their buyers that they work with, what's your minimum net profit that you look for on a deal? What's your deal, ROI that you sort of look for in the deal calculator that we use, which is primarily a fixed and flip calculator, just so happens to have.

Stephanie (44:50):
I used that all the time. By the way. I use that deal calculator every day still for two years I've been doing it. Yeah, well, you're right. I have made a post or two in the community that I'm a cash buyer and laid out a few things that I look for. I know that I don't want to make less than 40 grand on a deal, and I know that I don't necessarily want to put a black and white answer on, well, what's your ROI requirement? Whatever. Because right now, as I said at the beginning, my goal is to just refill my coffers. I just need to make some cash. So I don't want to spend 32 weeks making 40 grand again, but if I spent 16 weeks or 12 weeks or eight weeks making 40 grand, perfect.

(45:41):
And I have had several of the wholesalers of the students in the community reach out and we've had some good conversations. Nothing has panned out yet, but there are a few people that work this market that have been trying to make something happen. So I appreciate that. It's a good resource for me. It's a good resource for them. I think it could work great. Of course, I'm still looking to try to find the deals myself as well, but if one of them finds something before I do or gets something under contract that makes sense, perfect. Sign me up. I'll gladly pay your wholesale fee.

Ryan Zomorodi (46:18):
Absolutely. It's a cost of doing business, and if someone brings you an amazing deal, it's totally worth it. Yeah,

Stephanie (46:23):
Yeah, totally.

Ryan Zomorodi (46:24):
Yeah. So now that you have these deals under your belt, you have some rentals, what's life now that you've kind of proven the model to yourself and you're scaling up? You started as a thought, started as a dream, started as an intention, but now you're actually doing it. Now you're in it. So I mean, what's life like now that you're flipping houses?

Stephanie (46:46):
It's busier. Well, it's good for me. As I mentioned earlier, my clock is ticking for my regular job, my business that I'm going to be selling in a couple years. And so for me, this journey of the flipping has 100% given me confidence that this is something I can do and this is something I can do well, and this is something I can scale when I have a little more time. I'm struggling a little with that now because I have the other business as well. But your group, it gave me such an amazing foundation, and I can't tell you how grateful I am for all of the help you guys have given. I mean, the training in and of itself is great, but even in the real world, when I can just pop in the community and just say, oh God, I have this issue. What would you do? Or whatever, it's truly, truly invaluable, and I really, really do appreciate it. And I just feel like with the networking and the community and just every bit of experience that I've gained through this journey, it just makes me feel confident. I know this is what I'm going to be doing for the next however many years. I might do this till the day I die. Who knows?

(48:14):
It's a lot different than a nine to five sit at a desk kind of job, which I'm cool with. If I can be flexible, if I can be making money, but still be flexible in my lifestyle, I would do this for 30 years. I don't care. It's fun. I love it. I love the problem solving. I love hate the headaches, love hate relationship, but I just love every bit of it.

Ryan Zomorodi (48:42):
Absolutely. Yeah, I'm right there with you not planning on giving up on real estate and planning to do it for the foreseeable future. It's a career that you can take all the way to the grave and beyond. So definitely right there with you.

Stephanie (48:58):
And I think just continuing to learn and figuring out ways to do things better. I may have mentioned this to you a while ago. I'm actually getting my real estate license. I'm in the process of doing that, not because I want to sell real estate, but because it will help me find better deals for myself, make better deals for myself on the buy side, and maybe I will sell my own deals. I'm not sure, but it, it'll help these skinny margins be a little bit more friendly for me. And so I just think there's so many different avenues and so many different ways that you can take the real estate journey, and I just think for me, it's a great way forward.

Ryan Zomorodi (49:43):
Absolutely. Yeah. I love that you're just looking to learn. You're looking more tools in the tool belt. It's a reason why we don't just talk about wholesaling. We also talk about flipping buying and holding because it's a very opportunistic industry. Once you learn the business and really just start to expand your mind and get these skills, there's so many ways that you can take advantage of it and you can create the business that serves you versus you serving a business. So it's really cool that you found your niche and that you're growing and doing this really on the side of a full-time commitment. This is business that you've had for many years, and now you're kind of fitting the real estate on the side of that and have done so well in light of that. And so I think you're setting yourself up to really ramp things up if you decide to go full-time on it in a couple of years once you exit your other business.

Stephanie (50:38):
Yeah, I mean, that's the plan. And so far everything looks, I feel like I'm on the right track. I definitely do.

Ryan Zomorodi (50:48):
Amazing. Are you looking to expand your rental portfolio as well, or are you going to just be kind of buckling down on the flips and just stack as much as you can?

Stephanie (50:58):
In the long run? I will definitely acquire more rentals, but for the next just couple of years while I'm trying to get out of my other business and refill my coffers with this one, I'm just going to keep focusing on flips. But yeah, I definitely do have a goal of another handful of rental properties. It makes so much sense. It is just, for me, it just makes the most sense in the world. I like the short-term rental game because, well, in another previous career, I used to work in the hotel world, so I have a lot of experience in hospitality as well. So the short-term rental game, I really like not a big fan of being a landlord, so I don't really want to do long-term holds, but long-term rentals. But I know that that is also something I may consider looking into down the road.

Ryan Zomorodi (51:55):
Absolutely. Yeah, the game is just acquiring real estate and to be able to hold it, that income allows us just to hold it long-term and ideally produce some cashflow along the way. But I could speak from experience. A lot of the houses that I flipped in the past, they're worth a lot more money now. And if I had just figured out a way to hold them, I'd probably be better off. So I think a lot of

Stephanie (52:14):
That's how I feel about my very first rental that I sold.

Ryan Zomorodi (52:17):
Yeah,

Stephanie (52:18):
Yeah, exactly.

Ryan Zomorodi (52:19):
Exactly. Yeah, so that's awesome, Stephanie. I love the path that you're on and the accomplishments you've had, and it's just been a joy and just to watch you and be a part of it. So we're all so proud of you here, Real Estate Skills, and you're definitely a rock star, and we so appreciate you sharing every time in the community and hopping on a second time here to share with our audience just about your amazing journey. And I know it's still just the beginning for you, so like you said, you're on a springboard. So we look forward to continuing to serve you and being right there for you on the next chapter.

Stephanie (52:53):
Thank you. Thank you so much for saying all those things, and thank you guys for being here and such a great resource. And for anyone who actually does watch this and is trying to just make their first deal happen, trust me, I a hundred percent get where you are and I feel it. I feel the stress, and I feel the anxiety and the fear that prevents you from wanting to take that first big leap or whatever. Just do it. Just keep doing it. It keeps, keep your nose to the grindstone and it will happen. It will happen eventually. It took me a long time. I thought it took me a long time anyway, and I didn't take the conventional, I didn't take the route that I thought I was going to take, but I'm happy that I just kept doing it, and you guys have been just amazing in your support, so thank you.

Ryan Zomorodi (53:46):
Yeah, no, you're very welcome, Stephanie. Yeah, thanks for those words, for those who are in that position and just need a little bit more encouragement because the only way to really fail in real estate is to give up. So I think you're a great example of that. You stuck with it, you even pivoted strategies, and now look at you. You're tearing it up and you're ripping deals and you're just leveling up. So we're really just excited to see what's next for you, Stephanie. Yeah, again, thank you everybody for watching and hope you guys are inspired and see what's possible with real estate. Whether you're looking wholesale, flip houses, or start acquiring rentals, there is a path for you. So for anyone else who wants to learn more about how to get involved with the Real Estate Skills community, just go to RealEstateSkills.com to learn more. Thank you so much, Stephanie, and look forward to chatting with you again soon.

Stephanie (54:35):
Thanks, Ryan. It's been fun.

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