Our First Deal - Single family fix, rent, sell

[Peyton Moss]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $215,000
Cash invested: $15,000
Sale price: $360,000

Bought a 5 bed 2 bath single family with the plan of fixing it up, then renting it out, then cash out refi to buy the next deal. Agent found the deal on the MLS, but the owners were getting divorced and selling low. Plans changed, and we rented it to college students after a few months of living there and updating. When the market was too high to ignore and the leases were up, we did some final fixes and sold.

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

I had been listening to the BP podcast since 2016 and talking all the time about wanting to buy real estate. My wife kept waiting for me to do it, but I never did. So she called the agent, found the house, and we realized it wouldn't be much more that we were renting for and had lots of potential with some updates and fixes. We called her dad to get help with the down payment, and he thought it was a great idea and we got the place!

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

My wife got with an agent who knew the selling agent and owners. They were getting divorced and needed money quick, and our agent (also an investor) walked us through what we should offer helped us understand the process.

How did you finance this deal?

2k of our money, and 6k of my wife's dads money. Sellers paid a chunk of closing as well.

How did you add value to the deal?

Painted, ripped out some cabinets, put in baseboards and carpet, cut a window in the basement to make 5th room official, put in 5 windowsills, tamed the yard which was all weeds and old clotheslines, repainted and repaired eves.

What was the outcome?

Made enough money to become debt free, get a modest savings/reserves, and have 30k+ to invest in the next deal. A lot of it was due to the crazy market, and we feel very blessed.

Lessons learned? Challenges?

Buy real estate now. Get in the game or watch for 5 years and make no money. Also learn how to manage a rental before renting.

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

Karsten Reed in Cedar City is an incredible person. He is a broker, and knows all the right people and agents to get you great deals.