Live and flip in rural CA

[Libby Earthman]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $241,000
Cash invested: $80,000
Sale price: $542,000

Live and flip near a university town in California.

How did you add value to the deal?

Lots of sweat equity. We knew no one else could see the potential given its cosmetic condition, and since it had been on and off the market so many times, we negotiated the price down $60,000 from list, and they fixed $10,000 of damage before we closed. We pulled shag carpets, refinished 2,000 Sq ft of hardwoods, landscaped with drought-tolerant plants, and repainted. The well went dry our third year there so we spent a lot on that, but it was unavoidable.

Lessons learned? Challenges?

House was on the market for a long time before we purchased it, and was in rough cosmetic shape. We negotiated a lot of concessions and a reductions in price--enough that our realtor was panicked a bit with our requests. We held firm and got almost all we asked for. We learned a lot and made a lot, but will not buy on a busy road again.