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Updated about 3 years ago, 11/19/2021

User Stats

62
Posts
33
Votes
Thomas Magill
Pro Member
  • Investor
  • Charlotte, NC
33
Votes |
62
Posts

1100 sq ft smokers palace/pet toilet to incredible sub to flip

Thomas Magill
Pro Member
  • Investor
  • Charlotte, NC
Posted

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $84,257
Cash invested: $58,443
Sale price: $181,000

This property was unique because it was the first time I've done 'subject to' financing for a flip. The seller was about to go into foreclosure until Covid hit and then her case was continued until mid July. I stayed in touch with her throughout the process and eventually closed. I purchased the property at as a 2/1 and converted it to a 2/2. The previous owner had pets that used the home as their 1400 sq ft bathroom so I refinished all of the floors and Kils the walls.

What made you interested in investing in this type of deal?

At the time of purchase, a lot of my private investor money was deployed on other projects. So, this project was very appealing because they were offering it at 'subject to' because the owner owned more than the property was worth.

How did you find this deal and how did you negotiate it?

I got this deal through a direct mail campaign. This was a very unique seller. I don't know how much I can share but lets just say she was different.
I negotiated with her directly and we came up with a price to pay off her home and provide her with a little money to move. She was very pleasant to deal with while she was sober, but once she got a couple drinks in her she was pretty nasty. Once I paid off her bank I cut her a check that she never cashed, very strange.

How did you finance this deal?

The cost of the home was financed 'subject to' and I self funded the cost of construction.

How did you add value to the deal?

I added a bathroom (owners suite), took out the drop ceilings in the living room, opened up the floor plan, and new kitchen/ bathrooms/roof/HVAC/Electrical/Plumbing.

What was the outcome?

I sold to a great guy who has since done some additional work to the exterior of the property with a fence.

Lessons learned? Challenges?

The biggest lesson learned was I needed to get access to the lending institution's pay off amount. There is a form the seller signs that allows the 'subject to' buyer to access. The lender would not provide the pay off amount until January 1st 2021 for tax purposes, I'm assuming, so I had to wait two months to close on the property.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No

  • Thomas Magill