SFR that became an STR and fix and flip

[Aaron Porter]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $165,000
Cash invested: $80,000
Sale price: $295,000

Originally purchased the property with the intent of living in it. We bought it out of foreclosure and in need of major TLC and updating. Property is located in Cardston, Alberta Canada

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

The property sat on a 1/2 acre lot with a huge backyard. It had 4 bedroom and was cheap. We were able to pick up the home way under appraisal out of foreclosure. I have a lot of experience doing the labor part of renovations as that is another thing that I have done in my very extensive work history. I knew not only would the house be a good house to live in it would make a great investment after the renovation.

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

found the home on realtor.ca, and used a good friend who is a local realtor to submit the offers and close on the property. We were negotiating with the bank and luckily there were no other competing offers.

How did you finance this deal?

The purchased with cash lent to us by my father in-law. By doing this we were then able to go to the bank and take out HELOC to pay for the renovations which I did solely by myself. (with the exception of installing the new carpet). After the renovations were finished we got a new appraisal, and refinanced the house with a local credit union and paid off the hard money loan from my father in law with 9% interest.

How did you add value to the deal?

I found the home to purchase, after the purchase I did all of the required work for the renovations. This home was a complete gut out to the studs, replace all the windows, new exterior siding, major electrical upgrades, plumbing upgrades, all new bathrooms, added a bedroom in the basement.
after we finished the home we decided to leave the country and placed the home on Airbnb. It was a short term rental for 1.5 years where it provided enough income to help us travel through Mexico

What was the outcome?

After my wife and I separated we decided it would be best to sell the property. We listed the home and although we didn't get as much as we would have liked it was still a very worthwhile business deal

Lessons learned? Challenges?

It is very draining to run a business and renovate a home by yourself. There were many challenges including spending too much time away from my children. I found that having a good partner is invaluable. whether that partner is a spouse or a business partner. Those relationships will make or break any opportunity that you have in your life.

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

Mike Walker with Lethbridge real estate .com handled the sale of the property and did a great job.