House Flip Hiding In Plain Sight

[Brooks Beaudoin]

Investment Info:

Single-family residence fix & flip investment in Atlanta.

Purchase price: $499,900
Cash invested: $25,000
Sale price: $765,000

This was a somewhat "accidental" fix and flip in the Morningside neighborhood of Atlanta, GA. I bought this house to settle down in long-term, part of my acquisition strategy was to buy something run down that I could update and add value to over time. Three months after closing, the pandemic hit and I was faced with losing my job, so I flipped it and moved to the west coast.

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

I wanted to build equity through forced appreciation. It was a dumpy, neglected house in a great neighborhood with a massive .5 acre lot on a cul-de-sac and had a lot of potential.

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

I found it with a real estate agent, we didn't think I could afford anything in this area but this popped up and we went to take a look. There wasn't much negotiating power, we had to move fast because I knew there would be significant demand for this house. I offered two hours after we toured the property, and closed on the deal in two weeks.

How did you finance this deal?

Conventional mortgage, with 5% down. I financed the renos with my 401k and credit cards.

How did you add value to the deal?

The property was drastically overgrown with vegetation, the backyard looked like Vietnam! Cleaning up the exterior, planting sod, and strategically cutting down trees in the front and back yards added significant value. Complete renovation of the kitchen and dining room, and cosmetic renovations to both bathrooms. Painted the entire house inside and out.

What was the outcome?

The house was completely transformed, and sold quickly during the christmas holiday season. I cleared approximately $100k after closing and reno costs.

Lessons learned? Challenges?

You always make the money when you buy. Also, it was critical to have access to reputable contractors who completed work on time and on budget. The biggest challenge was living at the property during the renovations, I don't think I have it in me to ever do that again!

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

Adrian Schmidt with Atlanta Fine Homes Sotheby's International Realty.