2 family flip in Lewiston - first of many!

[Jonathan Bombaci]

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $100,000
Cash invested: $57,520
Sale price: $300,000

Contributors:
Garret Getch

This was a good one to kick off our Lewiston ME portfolio flips. For those that don’t know we bough 12 properties off of the worst landlord in the city. He was being sued by the city and weeks away from losing the properties to the bank and/or the city. We bought them at a great price knowing were stepping into a rats nest (literally at a couple properties). Just to put it in perspective of how bad it was. We bought 56 units and in the first month of ownership we collected less than $5000 in rent. Almost none of the tenants were paying and all housing authority’s were withholding payments until health and safety items were addressed.

If you want to make a lot of money in Real Estate you have to get used to solving really hard problems. That being said we find half the time just by removing the seller/current operator, you can solve many of the problems overnight.

We have 2 sold, 4 ready to go on market, and 2 being prepared for refinances. So we’re just over the halfway hump and the team is looking forward to wrapping these up. Anyways here are the numbers from our first sale!

12-14 Sylvan st, Lewiston ME
Purchase: $100,000
Closing and holding costs: $50,000 (includes wholesale fee and commissions paid)
Renovation cost: $7,520 (1 bathroom, paint, and aggressive pest control)
Sale price: $300,000

Profit/Loss: $142,000

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

There was a lot of meat on the bone but we knew it was going to require some very hard work to get this portfolio where it needs to be.

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

Through networking. This was brought to us by someone we know. Originally it was going to be a partnership but ended up turning into a wholesale deal and we paid them a very generous 6 figures for bringing us the deal.

How did you finance this deal?

Hard money with ABL

How did you add value to the deal?

This was the nicest property of the 12 we bought so we just had to get 1 resident on a payment plan and then do some very serious pest control.

What was the outcome?

$142,000 of profit in 2.5 months. Not to bad.

Lessons learned? Challenges?

As with all of these communication between all parties is a must. The agent, contractor, and property manager we’re constantly playing catch-up with me and I was the bottleneck. Build a strong team and trust them to work together to get things done.

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

Yes Garrett was did the listing and was fantastic even with a “difficult resident” involved. We also used ABL for financing and Doug Mercurio for all legal issues.