Fix and Flip in Spring, Texas

[Bryan Hoyem]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $80,000
Cash invested: $66,000
Sale price: $205,000

This was a text book flip project. We found it driving for dollars and sending direct mail. The owner was looking at foreclosure and the house was in terrible shape. I was able to pay her enough to get everything paid and get her started into a rental house that she could afford. For the house, in addition to all the work which included replacing the AC system and roof, I converted an underutilized addition into an additional bedroom and a dining room.

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

I had been managing flips for others and love the transformation that takes place. This was one that I was able to do for myself.

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

I found the house driving for dollars and send some direct mail. The owner called me and we agreed on a price after I visited the property and discussed both of our needs.

How did you finance this deal?

This was mainly financed through a private money loan.

How did you add value to the deal?

The repairs to the house were a huge value add on their own. The air conditioning system had not worked for years, the roof was shot and the yard was an absolute jungle. There was no flooring when I bought the house and the residents had just not had the ability to keep up with repairs for a long time. Beyond that though, there was an addition that I was able to divide into a new bedroom and a formal dining room as well as moving the water heater to the attic, really adding usable living space.

What was the outcome?

The outcome was that I was able to sell the house for considerably more than I had initially calculated.

Lessons learned? Challenges?

The initial challenge was the previous resident. They had requested a temporary lease back when I bought the property which I agreed to. However when it came to the end of the lease period they were still slow in moving out. Thankfully they did move out on their own without any additional steps required and we were able to maintain a friendly relationship through the transition.

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

This was before I had attained my real estate license, otherwise I would have been able to take on an even more complete handling of the entire process.