$250K in profit on my first flip!

[Janelle K. Eagle]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $703,000
Cash invested: $100,000
Sale price: $1,065,000

Purchased the property off-market directly from the sellers. Offered a six month lease back while they waited to find a new property to move into. Flipped in six weeks after they moved out. Sold for $65K over asking, which was over $200K above what I got it for.

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

The opportunity to get a property off market at a great price and to really help solve a bunch of the homeowners' problems so that we could all benefit.

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

The homeowner was in my social circle and noticed a post of mine and came to me!

How did you finance this deal?

The balance of the offer price would be paid to them once I sold after flipping.

How did you add value to the deal?

Used a hard money loan and seller financing. Structured the deal so that they could get the cash out that they needed to pay off some bills and have enough cash on hand to be ready to make a down payment on a new property as soon as one became available.

What was the outcome?

They ultimately found a property within sixty days and moved shortly thereafter. We flipped in a little over six weeks, including major renovations of kitchen and two baths. Spent substantially more than planned, but it ultimately worked in our favor as we were able to list for much higher. House sold within one week at $65K over asking in a multi-offer situation.

Lessons learned? Challenges?

It's VERY hard to project renovation costs when the house is FULL of stuff. Had the same sort of problems that so many do with subcontractors not showing up. It's important to have a big rolodex so that if someone drops out, you have options.

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

I represented myself as the seller, which also allowed me to increase my profits as I only paid 2% commission to the buyers' agent.