1st Fix and Flip in the books. Hard lessons...

[Brandon Espino]

Investment Info:

Single-family residence fix & flip investment in Colorado Springs.

Purchase price: $285,000
Cash invested: $5,000
Sale price: $445,000

UPDATE: old it $450000... The GC that our investor partner brought in turned out to be unskilled, unreliable and really messed up the entire project. We ended up having unresolved mold issues, sewer line holes, possible structural issues that ended up costing us at the end. We were lucky to not take a bigger loss than we did ($4,000 in total). I am grateful for this experience however, because I learned what NOT to do when flipping a home.

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

Cold calling foreclosures. Showed up as a listing appointment and presented a cash buy opportunity. Seller took it and we were off to the races.

How did you finance this deal?

Hard money. Outside investors brought in the downpayment.

How did you add value to the deal?

Brokered the deal, managed the contractors, picked out the materials.

What was the outcome?

4k net loss for all parties. Made some of that back on the commission. Definitely could have turned a profit if we were smarter on the initial inspection and chose a better GC.

Lessons learned? Challenges?

1. The cheapest GC isn't always the best one... You really have to vet them and see what they've done in the past and how the numbers on their end panned out vs what they promised. 2. Before getting into any kind of arrangement with other investors please make sure that you have a Joint Venture agreement that outlines who is putting in what kind of work and money BEFORE going under contract. 3. Don't be afraid to walk away during the inspection period. You make money on the buy, not the sell.

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

I'd recommend us as agents to buy/sell your next flip considering there aren't too many agents out there who have been through the experience... We did find some good 3rd party contractors along the way that came through big time when it came to mold remediation and electrical work.