Live in Fix and Flip

[Galen Heckathorn]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $705,000
Cash invested: $180,000
Sale price: $1,200,000

We bought this and moved in as our primary residence. It was very distressed, the roof leaked, 1 of the 2 bathrooms was in non functioning, and it came with 2 "tenants" living in trailers that we had to remove. It was a beautiful piece of land though on a private lane, with municipal utilities. We renovated the house over the next 18 months, doing 90% of the work ourselves. We vaulted the living room ceiling, added a covered porch, then replaced just about everything except the kitchen, New roof, floors, plumbing, bathrooms, 30% of the electrical system, paint inside and out, water heater, furnace, exterior doors, half the driveway. We also added a 1,000 sqft deck with 300sqft shaded pergola. Removed about 150 yards of trash and yard waste. Then we rented it out for a positive cash flow for 2 years as the market went up and then sold it.

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

We were young and wanted a project. It seemed like a great way to build some equity.

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

MLS, the property was horribly distressed, we were able to come up with about a 100k worth of repairs that "needed" to be done to the property that we had professionals bid. We worked the seller for a while with this and then asked them for 65k off the ask price.

How did you finance this deal?

traditional loan with 20% down.

How did you add value to the deal?

Through all the repairs we made, and by doing most of the work ourselves. We were able to get a lot of things done for cheap because we have a strong network locally of people as well.

What was the outcome?

Made a good return on our money and labor.

Lessons learned? Challenges?

Learned a whole lot and, honed our skills in the construction world, plumbing, electrical, flooring, framing repair, tile, paint ect.

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

Michael Lunning