Off-Market Fix & Flip

[Gabriel Graumann]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $345,000
Cash invested: $120,500
Sale price: $530,000

Off-Market Fix & Flip Opportunity

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

I've flipped several properties, and this one came to me off-market directly from the owner who saw my name on a sign in the community. Despite trying to convince the seller to simply clean it up and bring it to market for a much higher profit, the seller chose to sell direct for cash on a quick closing and no repairs made by the seller.

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

The seller needed some cash upfront to cover moving expenses as they were leaving the state. I was able to accommodate this and assist with providing moving supplies, help deal with an impound issue for a non-operable hauling trailer that was onsite, and simply acted as a resource for the seller.

How did you finance this deal?

I had money I needed to place somewhere, so this one I opted for all cash to removing all funding fees, ultimately netting me $10-12K more profit. I get many like to leverage everything to the max, but not me. When I have cash sitting outside of a deal earning next to no interest, and without a better deal to place those funds into at the moment a deal is presented, I'll utilize cash and save/make thousands from the lack of financing charges, fees, and holding costs. This also saves time.

How did you add value to the deal?

Hired my go-to contractor and he performed a full interior renovation, plus cleaned up the outside. Nothing too unique on this fixer, it was simply well worn and needed an update.

What was the outcome?

Considered holding this one as a long-term rental since I liked the area it was and the job growth in the local community. However, as I was finishing this one there were a couple of new deals in another state that had better initial and long-term upside on a buy/hold basis, so I cashed out of this one and reinvested out of state.

Lessons learned? Challenges?

The seller had several unique circumstances that would have made a traditional sale very challenging, but I still advised a traditional sale. GIVE THEM OPTIONS! While they may know what they want the outcome to be, there are multiple ways to exceed their expectations. I see so many wholesalers/investor taking advantage of sellers by not educating sellers and presenting them with options. I sleep better at night knowing the sellers I work are shown every option from traditional sale to discount.