This is why you buy properties correctly Flip

[Thomas Magill]

Investment Info:

Single-family residence fix & flip investment in Belmont.

Purchase price: $150,000
Cash invested: $33,300
Sale price: $249,900

This was supposed to be a homerun deal, that ended up being a ground rule double. The company who we contracted to fix the well on the property ended up breaking it completely, so we had to install a completely new well that cost about 7k, so that was a huge chunk of the ol' profits we were not prepared to let go.

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

This area is one of the premiere locations to buy around Charlotte, NC. I was really excited about this deal. Unfortunately, I learned some good lessons. We went a little about our renovation budget in an effort to sell the house for more and because we had a lot of room in our numbers. When the project was nearing completion the well contractor broke the existing well that worked but did not produce a lot of water pressure.

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

I found this deal through direct mail marketing. The sellers mother had just passed away deeded the property to her daughter. The daughter was distraught over the passing of her mother so I negotiated with the daughter's husband. He was a great guy and very helpful throughout the process. He called me the day of closing and asked if we could cancel the closing and give me $5,000 to hand the deal back to him. But, I respectfully declined and moved forward with the deal.

How did you finance this deal?

I partnered with a buy and hold investor who was looking to learn about flips. I also partnered with him on a buy and hold property for the same reasons. He provided 50% of the deals funding through a private money investor and I self funded the rest.

How did you add value to the deal?

We added value through a lipstick plus renovation. We did some plumbing updates as well as a new kitchen and bathrooms.

What was the outcome?

We eventually sold the property to a lovely woman who took my real estate signs off the street because she didn't want anyone else to purchase the property. She gave the sign back to me after closing.

Lessons learned? Challenges?

We did all of the things right on this property and hired the right contractors, but unfortunately things happen that you cannot plan for. ie a well contractor who is 'well' regarded breaking your well...

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

No