Latest fix & flip! 6 month project.

[Tim Callahan]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $150,000
Cash invested: $100,000
Sale price: $307,000

This was a pocket listing brought to us by our realtor. It was a vacant home, the owners were moving north. We got it under contract before it was listed on the MLS. This was the biggest project we have taken to date. Most of the work needed was foundation work. We had to shore up foundation walls by excavating all around the house, installing large steel rods and plates to shore up buckled walls. We then had to pour a new slab as it had a dirt floor. We installed drains, sump pump, vapor barrier on the walls. We built a whole new exterior bulkhead to the basement.
We also demo'ed the entire first floor down to the studs. Re-insulated all the walls, new drywall, all new electrical, new 200A panel, all new plumbing, new water heater. New flooring, most new windows, doors, new bathroom and kitchen, new appliances, new trim & paint.
The property was on 3+ acres with a very large barn in the back for livestock.
We put a ton of work into this house, and during the project, interest rates spiked a lot! So we took a reasonable offer on it with strong financing, instead of the highest offer. We made money, not as much as we wanted, but still made it work.

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

This was a pocket listing from our agent, and it looked like a project we could handle.

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

Our agent brought it to us. We made an offer that was accepted.

How did you finance this deal?

Cash

How did you add value to the deal?

Brought it to brand new move-in condition. Repaired (and spent a lot of money on) a long neglected basement.

What was the outcome?

We made a profit despite all the setbacks, surprises, and rate hikes. Not as much as we wanted, but we did it.

Lessons learned? Challenges?

Basements are expensive to fix, always consider that cost in your rehab budget. Keep track of rates as you go, as these will affect your buyers and final pricing.