Owner Occupied, Single Family, Flip

[Danny Abrahamson]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $415,000
Cash invested: $70,000
Sale price: $735,000

My first pursuit to equity build out!

In the first year, I managed a few cosmetic upgrades to each room and turned the basement into a functional workshop. I got lucky with rising property prices, refinanced the mortgage at a low interest rate, and used excess capital to pay off the friendly lender.

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

It was my only option at the time. No/Low money. Needed a place to live!

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

An all-star real estate agent, Cathy Lomasney in Billerica MA

She is not an investor-focused agent, but she is diligent in paperwork and process. Fully representative of us as buyers

How did you finance this deal?

A first-time home buyer with only 3% available for the down payment. We leveraged a family-friendly loan to make up an additional 20%.
Terms:
- 2-year payback
- the loan was from a variable HELOC; amortized monthly payments based on the variable interest rate of that month

How did you add value to the deal?

Used HELOC to do a major upgrade of retaining walls, refinished a bathroom, did significant landscaping, added additional SF in the basement, added a new heat pump system, and refinished flooring. Tons of sweat equity

What was the outcome?

Net $289,000 over four years after paying off mortgage and HELOC.

At that time, current property rates allowed to leverage added equity to another property. We had been in the house for over three years and avoided capital gains. There was some liability with the house (location, water intrusion), so it made sense to sell rather than pull equity and rent.

Lessons learned? Challenges?

Patience and a good partner

Don't let good contractors go. Don't let others go with bad contractors

A good stager is worth the money

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

Cathy Lomasney, ERA Key, Billerica MA