SFH Level 2 Flip in Bristol CT: $48k Profit sold Off Market

[Joseph Salzillo]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $216,500
Cash invested: $40,000
Sale price: $320,000

Cape house flip on side road in Bristol, $48k profit sold off-market after Private Money Holding Costs, Buying Costs, and Selling Costs.

Re-grade land in back of house and provide new landscaping across plot of land.
Replace roofing on back end of house where active water leak occurred.
Two full bathroom gut jobs with custom tile showers and radiant heat flooring.
Refinished the hardwood flooring and ripped out carpet across house.
New GE 4-set appliances (Refrigerator, Range, Microwave, Dishwasher).
Granite countertops in kitchen and bathrooms.
New finish electrical and finish plumbing across house.
Two coats of beige paint at the request of buyer across house.

We bought this house on-market as a Short Sale and had to re-negotiate price with the List Agent and then ultimately the bank. In the end, it took long to close but worked out for all parties and we are on to the next one!

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

We have begun flipping houses and using the profit from flips to fund long term rentals.

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

I found this house on the MLS and it was sitting on market for awhile; ultimately ended up negotiating the price with the bank after some back and forth for a few months.

How did you finance this deal?

This deal was funded via private money: the lender funding $255k at the closing table ($216,500 purchase price, the rest went to buyers closing costs and construction) so we got back ~ $35k to purchase the house. The loan costs 2 points of the full amount, 10% interest-only, and 1-year balloon with a 30-year AM schedule.

How did you add value to the deal?

We took a house that was unlivable, and added some custom features that a specific buyer of mine wanted. They were willing to pay more on the construction side to customize their re-development, understanding that this house comped out to roughly $320k ARV. The buyer actually had the house appraise to $327k when they purchased.

What was the outcome?

We made a $48k profit to sell this off-market after all expenses.

Lessons learned? Challenges?

There were a lot of issues with the bathrooms that we did not expect. Rot was found on many of the joists when we opened up some walls, so we ended up having to pull plumbing and bathroom rehab permits with the town to make sure we were re-building the bathrooms properly. This project ended up taking about 2 months longer than it should have because of this, but we accounted for this in our holding costs.

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

I was the real estate agent representing us on both the purchase and sale!