Out of the Flippin’ House Flipping Business

Fllipping a HouseIf you’ve been following this blog for a while, you’ll remember that Jim and I became investor partners in a house flip way back in April 2012. When flipping a house, a main point is to get repairs and renovations done quickly to minimize carrying costs. Originally, we planned on a six month turn around, but you know what they say about the best laid plans , especially if you have to rely on partners to make things happen. Somehow in early November of 2013, we still found ourselves part owners of this property with so much potential, yet there it sat, unfinished and empty, while time continued to move forward and other opportunities passed us by. Yesterday, we put an end to our career as house flippers, even though it meant not making any money.

Out of the House Flipping Game by 2014

We have so much going on in our lives right now with purchasing a commercial building, selling my practice, and trying to build our real estate holdings for early retirement. We were more than over the delays and excuses that seemed to keep coming with the flip. No work had been done on the house since the end of September, despite our earlier ultimatum. We were very serious about wanting to be done with this deal by the end of the year. We  produced what I though were three very fair choices for our partners.

  • Option 1Finish the House: We would stick with our original agreement to fund the project and our partners would do the work, but he house had to be done by the end of November and ready to list.
  • Option 2 Hire Someone to Finish the House: We would hire an outside party to finish the house by the end of November and have it ready to list. Costs to hire another contractor would be reimbursed out of the final profits.
  • Option 3Buy Us Out. We would walk away from the project if our partners would pay us enough to cover what we owed on our HELOC plus the money we’ve spent in interest and taxes. This total came to  $91,500.  This option would give them full ownership, and they could finish or not finish the house as they pleased. We offered a similar choice before but added a little profit for us. At the time, they said they did not have the money to buy us out. It would have cost way too much for us to buy them out plus have to pay for the rest of the repairs, so we did not offer that option.

We also told them that if they didn’t agree to one of these solutions, we would have to bring in attorneys to dissolve the partnership.

Not surprisingly, they chose option 3. It makes sense. Most of the  money needed to finish this house is for appliances and counter tops. All other materials are purchased and ready to be installed. They get a great house for just over $91K. If they ever do get it ready for sale, it will easily go for $150K, possibly $180K.

What’s In It For Us?

We really get nothing out of the deal except our lives back. The stress of dealing with partners who didn’t do anything and seeing our empty house every day was a killer. Technically we got back the money that we put into this project, but we’ve earned nothing on that money for the past 20 months. We wouldn’t have taken out a HELOC to invest in the stock market, but we certainly could have purchased another rental property. We will also owe a little in taxes from the sale, but we got quite a bit of money in tax deductions last year, so it’s a wash.

I still have no idea what happened to our partners. I’ve racked my brain to try and see a reason why they couldn’t seem to finish the job. In the end, I guess it really doesn’t matter. I will be watching, though, and if suddenly the house is done and up for sale in a few weeks, I’ll know they were stalling to get to this outcome.

In the end, our real estate egos are a little bruised. Our heads aren’t held quite so high, but we live to fight another day, armed with the experience of this house flipping mess to guide future decisions. I already have my eye on a couple of properties, so we’ll see what 2014 holds.

Have you ever been in a partnership that went south? Were we right to sell out for no profit?



FREE Stuff Delivered to Your Inbox!

Subscribe and be the first to get notified of new surveys, giveaways and sweepstakes from your local retailers.

Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, of course, writing. She is currently the editor-in-chief of Snipon.com.


  1. My friend was in a partnership that nearly fell apart. He bought a house with the guy and the rental situation got complicated when my friend’s biz partner (and roommate’s) girlfriend was going to move in. In the end they avoided having to sell the house and will keep the house and cash flow they are receiving from rent. I’m weary of partnerships and would rather start something and potentially open it up to other investors, but I’m a paranoid control freak!

    1. I think in this situation, that would have been a good quality. I often assume people will do the right thing, and well you know what happens when you assume.

  2. I think you made the right decision Kim. I know you didn’t make anything out of it, but I think the result of a wash is worth it so you don’t have to deal with it anymore. I’m with the others and wondering why the other party didn’t do any work, but glad you didn’t have to get lawyers involved.

    1. I am not sure what happened. All I can guess it is was some sort of personal conflict between the two of them or maybe they were hoping to buy us out in the end to keep all the profit. I’ll never know.

    1. I don’t think they started that way, but I’m thinking maybe when they realized we weren’t happy, they though they could stall and buy us out. That way, they get all the money from the sale. I really have no idea, and your mind goes crazy trying to make sense of it all.

    1. They did lots of work. They just stopped short of finishing it enough to get listed. I have no idea why unless they were hoping to get control of the property to keep all the profits. I’m sure it didn’t start that way, but I’m thinking they knew we wanted out and this was easy for them. For a while, I considered doing letters to the editor about their business and stirring up some emotions to get them moving, but in the end, negativity just breeds more negative things. I’m glad to be out.

  3. Sounds like you made the right decision in getting out of that deal, Kim. So glad you were able to get it done with not much money lost too. I know what you mean about the real estate market being a bit scary. We have good friends who are down about ten grand right now due to a crappy tenant. 🙁

  4. I used to watch those house flipping shows all the time and it always amazed me the risk involved. It would be fun to transform a “fixer upper” into something bright, shiny and new, but it seems like there are too many variables involved in whether you’d actually make money or not.

    1. I think if you know how to do it all yourself and have time, it can be a gold mine. We don’t have enough skills to pull off a project of this size and relying on others got us in trouble.

  5. What a bummer that your partners did that- at least you got out! I bet it is a huge sense of relief to be done with that. Do you think you’ll ever take a real estate partner again, or will you guys be flying solo from here on out on the real estate front?

    1. No partners ever again, but we still plan to purchase more real estate. I don’t think we’d do a flip, but long term rentals are what we are hoping for.

Leave a Comment

Your email address will not be published. Required fields are marked *

Hit Enter

Cookies help us deliver our services. By continuing to use the site, you agree to the use of cookies. More information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.