Dan Rivers, a real estate investor with a portfolio of 16 homes valued at $2.7 million, flips homes. Rivers' most successful flip to date was a six-month project that netted him more than $180,000. He shares his secrets to success and the hidden costs to avoid to stay within budget.
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Dan Rivers started investing in real estate in 2019 at age 38. The year before, he'd left a 12-year career in property management to work as a real estate agent, and the bet seemed riskier after he'd made just $28,000 in his first year in his new job.
But Rivers, who grew up with many health issues, including a tumor and a congenital heart murmur, always had a “take it bold or give it up” mentality.
“I'm not afraid to take chances or risks. I believe I'm on borrowed time, so I have a 'let's give it a go' mentality,” he told Insider.
But adopting this mindset has certainly paid off for Rivers, who is now 42 and lives in Charleston, South Carolina, with his wife and daughter.
According to official documents reviewed by Insider, Rivers has built a real estate portfolio that includes ownership interests in 16 units across 12 different properties since purchasing his first property in 2019. The total value of the portfolio is approximately $2.7 million, but Rivers' personal equity in the properties is over $1.9 million.
In addition to rental income, Rivers has invested nearly $1 million in multiple real estate syndications and is also actively involved in several other avenues of real estate investment, including wholesaling, private lending, rental income and resale, through Rivers Capital Group, a full-service real estate services firm that Rivers founded in 2020.
In fact, home flipping has been a big part of Rivers' real estate success. In a recent interview with Insider, Rivers detailed his biggest flipping successes and failures, and also offered some advice for aspiring home flippers.
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Rivers first became interested in home flipping in 2019 while working as a real estate agent.
At the time, he helped local property flippers find properties they could buy, then sell them after they were renovated. Soon after, Rivers was providing personal loans to the flippers, taking about 20% in return.
Soon, Rivers began wondering how much money he could make if he tried his hand at flipping houses himself.
“She was making seven figures a year flipping houses, and I thought, 'Why don't I buy a couple of houses and renovate them?'” Rivers recalled. “I had a construction background and understood the financial side of it, and I was just starting to make connections with private capital to get loans for these things.”
Because Rivers didn't have much money saved up at the time, he turned to private hard-money loan companies for these flips. Rivers says these companies would lend him about 90% of the purchase price and 100% of the renovation costs, in installments, meaning he only needed about $10,000 to $20,000 to buy the homes he wanted to flip.
“In the beginning, I saved a lot of the cash I had and put it towards reinvesting. I tried to reinvest as much money as I could,” Rivers explained, “so after I sold it once or twice, I had my own money to cover the cash shortfall, and then I was able to use the cash to cover most of the costs of demolishing the building and renovating it.”
Rivers started out small, flipping just a few homes, but after scaling to about a dozen flips a year, he decided to create Rivers Capital Group and assemble a dedicated team.
Today, Rivers estimates he flips 10 to 15 homes a year, depending on the market, because he cares more about the profit he makes per resale than the overall number of resales. “I want to reduce risk, reduce the number of resales and increase my income,” Rivers explained.
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Rivers' biggest win was more than $180,000.
Rivers' biggest home-flip success to date was making more than $180,000 in profit on a project that took about six months to complete.
Courtesy of Dan Rivers
Located in one of Charleston's most popular neighborhoods, Rivers recalled, the property was first listed on Craigslist three days before Christmas 2021. The asking price for the home was $100,000, but after speaking with the seller in person, Rivers offered $106,500.
“I wanted to cover the legal fees and I wanted to put a little more money in his pocket because I knew it was a good deal and it made him happy,” he said, “so we signed the deal on the spot, like two days before Christmas.”
Insiders confirmed that Rivers borrowed a total of about $180,000 for the property, which was used to cover the purchase price of the home and some of the renovation costs.
During the major renovation, Rivers hired an architect to expand the floor plan and add supporting structural beams, added a third bedroom and a small laundry room to the property, and upgraded the entire master suite bathroom, including adding a walk-in shower and dual vanities.
Rivers also renovated the rear deck and shed, replaced all the windows, repainted the exterior, installed a stone driveway and landscaping, and completely renovated the exterior of the home, including updating the lighting fixtures, flooring, and kitchen appliances, and painting the entire house.
Rivers told Insider that the entire renovation cost just over $100,000, with about $30,000 of that coming from his own pocket.
Once renovations were complete, Rivers sold the property in July 2022 for $425,000, according to official closing documents viewed by Insider. After deducting $37,000 in holding costs, including a hard money loan, Rivers made a profit of $175,000 on the deal, and after deducting another $8,500 in real estate agent fees, he made a total profit of more than $180,000 on the deal alone.
While making that much profit from a six-month project is certainly impressive, Rivers says these situations are rare. “We've definitely had some of these wins, but for the most part, I'd say the average profit is probably around $30,000,” Rivers says.
“Everyone watches the HGTV property flipping shows and everything looks great, but there's a lot that goes on behind the scenes: finding financing or using private funds, managing contractors, timelines, making sure the numbers and repair costs are right, because most of the time they go over budget,” Rivers continued. “Plus there's the risk that the market will change and you'll lose $10,000 instead of what was supposed to be a $40,000 profit.”
Avoid hidden costs that lead to budget overruns
In fact, it was unexpected costs and unforeseen factors that led Rivers to lose more than $6,000 in his biggest failed resale to date.
Rivers told Insider in August 2021 that he purchased the home in North Charleston for $114,700 just days before leaving for a vacation to Hawaii.
“I went out myself and took a quick look under the house and the crosswalk, and from what little I could see it looked fine. We got an estimate for the work and left,” Rivers recalled. “When we came back we found that the floor joists and almost all of the flooring on three walls had to be replaced due to termite damage.”
The termite damage alone cost Rivers about $35,000 more than he expected, but with several other unexpected miscellaneous expenses, Rivers ended up going about $40,000 over budget, bringing the total cost of the renovations to about $93,000.
About six months later, Rivers sold the house for $231,000, he told Insider. But various holding costs and a hard-money loan added another $30,000, meaning Rivers lost more than $6,000 total on the deal. Luckily, Rivers' real estate commissions covered a few thousand dollars less, keeping his total loss to just over $2,000.
Despite the financial and time losses, Rivers learned some important lessons from this project: First, Rivers now makes sure to get a termite inspection before purchasing any new property.
“I looked at properties in a hurry, got a bit overconfident and made the purchase. That was a lesson learned,” he says. “Now I have a detailed checklist and make sure I don't buy a property without doing these things.”
Rivers used to go over budget on miscellaneous fees, so now he makes sure to leave a little room in contractors' price quotes. “If they say a project is going to cost $60,000, I'll budget for $65,000 or $68,000. I've gotten better at that,” Rivers says.
Rivers added that permitting often delays projects, which in turn increases the cost of holding the property, a cost that is inherent in privately funded financing but that investors rarely take into account, he said.
“That house was costing us about $2,400 a month,” Rivers explained, “so we analyzed it and thought it would be done in four months, and it actually took seven months, which means it cost us another $7,500.”