New Manayunk Flip - Philadelphia

[Ryan McLaughlin]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $167,000
Cash invested: $49,000

This 3 bed, 1 bath, 1450 sqft rowhome will soon be a 4 bed, 3.5 bath with 2100 sqft - by adding livable space to the basement. We should be on the market by the end of summer and we hope to list for $425K. We anticipate having $49K tied up in the project - mostly funded by our new HELOC.

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

I sourced the property off market. The house was visibly in need of repairs and when the tenants were moving out I sought out the owner. Tracking him down through a neighbor, I was able to work out a fair price for the house and we closed right after Christmas.

How did you finance this deal?

We are funding through a hard money lender, Direct Mortgage here in Philly who I highly recommend. We are putting up half of the capital and our partner will match. We put up 20% of the purchase price and 2.5 points on the sum of the loan. We expect to have $45K tied up here over the course of the project.

How did you add value to the deal?

I sourced and negotiated the deal. Initially, Jackie and I planned to take on this project by ourselves with a minimum scope of work: rewire, central air, kitchen, bath and floors. I brought our now partner through - an experienced GC and builder, to get his eye on the project and he took a liking to its potential. He offered to partner with us as GC, expand the scope, thus upping the ARV and we couldn't say no. We are 50/50 partners in and out.

Lessons learned? Challenges?

My favorite thing about this project is being hands off in the construction. Aside from some accounting, design input and logistical coordination we are not involved in the daily operation. This allows us to focus on our business as Realtors. When I try to do too many things at once, I don't do any of them well. I'm looking forward to watching and learning from our GC/ parter as I have in the past, bringing more construction knowledge into my orbit, making me a better Realtor & investor.

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

Direct Mortgage has been great. My wife and I are agents. Reach out any time!