“I flipped a foreclosure hiding a horrible surprise inside.”

Retired grandmother (and Playbook reader) Dona Ashby runs a family flipping business with her daughter, buying foreclosures in Indiana and selling them for big profits. But she made one recent purchase without getting a look inside the house. How bad could it be? Find out below.

How’d you get into investing in real estate? “In 2019, I retired and moved to Indiana to be near my daughter Randi and her family. Once she moved to a bigger house, I helped her sell her old one in a ‘for sale by owner’ to save on commission costs. Many years ago, I was a Realtor, so I knew how to present and sell a house. I went over and painted the rooms a neutral color, caulked, touched up baseboards, and added molding. I found that I enjoyed doing those things, or calling my son-in-law Aaron to come and do them. It was calming for me. Then we put it up for sale, and we actually made over $100,000 on it. That got me hooked. I thought, “What a fun way to make money!”

How’d you end up flipping foreclosures with your daughter? “Randi became my Realtor. She has a demanding full-time job, but she agreed to get her real estate license to help me out, and I sure appreciate her! It’s a great system because she charges me 1% commission, and it’s an activity we share that strengthens our mother/daughter bond. We check for sheriff sale properties weekly, which is the Indiana foreclosure process. Randi will run comparables on any property we see that looks good on paper to see what the difference is between the market value and the judgment amount the bank requires. If there’s a good spread, we will do a drive-by. If the house appears vacant, I will generally find a way to get inside and have a peek around. It’s not above me to climb through a window to get inside. Randi once climbed through a window and fell on a dead bird. I sure laughed my head off at her screaming, once I knew she was okay!”

How’d you end up with this nightmare foreclosure? “In December 2023, I purchased a house in Newburgh, IN, for $136,000. Since the house had not been abandoned, I couldn’t go inside the house to check it out before purchasing it. We couldn’t get on the property to even see in the windows. So I had to buy it sight unseen, and was it scary!”

How was it inside? “The people still lived there amidst the worst cockroach infestation I’ve ever encountered. They were so bad, you could actually smell the roach poop. When you entered, they dropped onto you from the ceiling. Randi has a big problem with insects, so the first time one got in her hair, she ran screaming from the house. There were actually cockroaches between the wallpaper and the wall. The tenants had moved out by the sale, so most of the furniture was gone, and a lot of roaches went with them. But three dumpsters worth of stuff were left.”

Gross! How’d you get rid of the roaches? “We contacted several pest removal companies; one wanted to cover the whole house in a tent and fumigate it. We opted for a normal method of coming in and spraying, and treating the house multiple times. He ended up coming back three times to re-treat before I no longer saw any live cockroaches. But the dead ones! Oh my gosh. There were thousands of them everywhere. I vacuumed dead roaches from the fireplace, from inside the vents, and anywhere else you can think of. I didn’t think we’d ever lose that smell, and we had to remove all the cabinets because the roaches had nested in them for so long there was no way to remove the dead eggs—which are extremely tiny by the way, but if you have thousands of them, are very easy to see. It was a total gut job. It took us eight months to get it to market: new roof, new water heater, new kitchen, appliances, toilets, floors, paint, carpet, and waterproofing for the basement. I hired out the roofing and flooring. My son-in-law Aaron put together and installed the kitchen cabinets, toilets, water heater, and numerous other repairs.”

Did you eventually sell the house? “Randi closed on the home in September 2024 for $234,900. We cleared $42,500 after expenses. But I hope to never buy another one without getting inside to look at it. Sometimes, doing this, you’ll get a stinker, and this one was mine.”

What lessons have you learned flipping foreclosures? “You can’t count your chickens until those eggs have hatched. One of my first lessons was on bidding at the sale. You’re in a room with seasoned investors who have crews at their disposal and who make their livelihood from this work. And here I am, a grandmother just playing around. When the property comes up, the bank bids first—that’s the judgment amount. If you’ve done your homework, determining what the market value is after renovations and how much the reno is going to cost you, you can confidently bid how much you’re willing to pay for it. At my first sale, I had investigated a property, climbed through a window to look around inside, and knew I wanted to buy it. But one of the other investors outbid me, and he got it because I wasn’t confident in exactly what it would cost to fix it up. That has happened to me a few times, being outbid because I was too scared. Now I’m much more confident in my ability to buy, fix, and sell a home.”

Any advice for others who want to follow in your footsteps? “My advice to anyone who wants to try this process is to have a bankroll. It takes money to make money. Foreclosure sales are all in cash, no financing allowed. So you’ve got to have the cash to purchase a home. You can use credit cards to purchase the materials, but you need cash to pay any subcontractors, like the roofing or flooring guys, and if you run into big problems, you’ll have to pay a plumber or electrician. If you don’t have a lot of cash yourself, make sure you have a source to borrow large sums, and you’ll have to factor in the interest you pay on borrowing that money. I was retired from a good career with access to my 401(k) money. Now I have a couple of rentals that provide me with cash flow to pay for supplies on the next flip.”