First fix and Flip

[Adam Boyette]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $220,000
Cash invested: $100,000
Sale price: $465,000

Found this abandoned home in the neighborhood we lived in. Found out who the owner was, negotiated the price and went under contract. Used a HML and PML to fund the deal. Had a local contractor that we had worked with in the past (learned alot of lessons on working with a contractor) to do the work. House went nder contract 4 days after listing for $35,000 over asking.

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

I enjoy the construction process and being able to add value to a neighborhood by bringing an old home back to life.

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

Home was in my neighborhood and I'd walk by it all the time. Found out who the owner was from the neighborhood gossip and called to see if he was interested. He moved out after a divorce and kept the house but never used it and let it fall apart (but kept the lights on and paid!). NEgotiated the price at $240,000 but during due diligence found a large foundation issue and renegotiated to $220,000.

How did you finance this deal?

Hard Money - 80% LTV with 100% of rehab costs.
Private money for 20% down

How did you add value to the deal?

New roof, new a/c, new kitchen, new master bath, new flooring, new landscape, painted inside and out. Mostly cosmetic except for foundation repair

What was the outcome?

Sold on MLS 4 days after listing. Had house staged which added value for the buyer to see how the place could look with furniture.

Lessons learned? Challenges?

1. Use a contractor to do the inspection, not an inspector (allows the contractor to know what he's getting into.
2. Keeoing a timeline with a contractor. Always have a backup contractor!
3.

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

Emma Gould represented us as the Seller's Agent and she was amazing!