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Updated about 3 years ago,

User Stats

30
Posts
9
Votes
Jason Runkel
  • Realtor
  • Racine, WI
9
Votes |
30
Posts

First Flip Completed

Jason Runkel
  • Realtor
  • Racine, WI
Posted

Investment Info:

Single-family residence fix & flip investment in Racine.

Purchase price: $65,000
Cash invested: $65,000
Sale price: $140,000

This was my first flip located in Racine, WI. It was an 800 square foot, 3 bedroom, 1 bath home. Something interesting about this home is it had no basement, which is odd for our area.

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

We saw an opportunity to get into the rehab space and ultimately an opportunity to learn as much as we could from either our success or failure.

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

We found the deal through a wholesaler on Facebook Marketplace. We ran our numbers using the BP calculators and a few others and negotiated the sale price with the wholesaler eventually coming to a deal.

How did you finance this deal?

Mostly cash, some equity from another company we own, and borrowing money from friends and family.

How did you add value to the deal?

This was a complete gut job, so we rehabbed everything including plumbing and electrical. We tried to add value to the deal by finding creative ways to optimize space in such a small house.

What was the outcome?

At the end of the day we came out with a profit of just under 19%, which was not bad being our first rehab project and with how everything went.

Lessons learned? Challenges?

We learned so many valuable lessons on this deal. Going into it our plan was to create a renovations company as an arm of our painting company. This would allow us better margins and more control. We quickly learned that this was more of a difficult task than we were ready for at the time, and that it would hold us back from scaling. We ended up hiring a local GC to finish, and will be using him in future projects, helping us scale and not be restricted only to our market in the long run.

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

This was my first deal as a real estate agent. There was a lot of learning that went on here as well especially with the market conditions at the time. Ultimately, it all worked out but not without some time and effort. Great overall experience!

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