Broke Even On My First Flip!

[Matt Friesz]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $144,000
Cash invested: $100,000
Sale price: $260,000

It was my first flip. Everything that could've went wrong did go wrong. I had no intension of working on the property myself, but ended putting in some long nights and weekends. The contractor at the day of the sale said they could do the rehab in about five weeks. I bought the place and it took about two weeks for them finally respond to my numerous attempts to reach them. They told me that they were too busy to help me. Come to find out later, they didn't feel comfortable working in that particular neighborhood. It was pretty rough. I finally found an old friend from who used to go to our church. He came in, gutted the place, and started putting it back together, but had an earlier job that he'd been waiting for permits to come in, the permits came in. So he left and I found another friend who started working for me. By this time I'm working my home inspection jobs during the day and then working at the flip at night. The first guy I had working for me had framed in the doors wrong (not plumb) so we had to reframe the doors. Well needless to say, IT WAS A LOT OF WORK. I basically broke even after closing cost, realtor fees, etc...I did a class B rehab in a class C-D neighborhood.
It was a great learning experience!

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

I just had to get into the game!

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

Wholesale company.

How did you finance this deal?

OPM Hard money, and some personal funds

How did you add value to the deal?

Did a full rehab.

What was the outcome?

I broke even, but learned a hell of a lot!

Lessons learned? Challenges?

Have more time to review the property, Have a contractor with a team ready. A big challenge is still getting systems in place.

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

Ben Coughanour with Mangrove Bay Realty and his team were and are FANTASTIC! I highly recommend them!