Flip house with Title Issues

[Casey Murphy]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $29,000
Cash invested: $58,000
Sale price: $135,000

We bought this small 3/1.5 at a sherriff’s auction. It’s in a a very rural location so i wasn’t very sure what it might appraise for and it needed a lot of work. All in we spent a little over 87k. It stayed on the market for about a month so I was eager when I got a full-price offer but had to pay 8k in closing. After paying closing and the seller’s realtor we profited about 35500 which i split with my parental partner’s. All in all it was a success but filled with learning opportunities. Buying from sheriff’s sales does not guarantee a clear title. So we spent about a month chasing down signatures from 3 different people. In addition to that I probable could have negotiated to pay only half the closing.

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

I really enjoy taking old outdated houses and turning into a place someone can be proud of. And i like big paychecks.

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

Sheriff’s sale

How did you finance this deal?

Me and my parents used our helocs

How did you add value to the deal?

Gutted it, rewired it, modernized it

What was the outcome?

35.5 k profit

Lessons learned? Challenges?

In the future I will either pay a title attorney or research title myself before going to bid. Sheriff’s sales don’t guarantee a clean title!

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

I did not