Our first project

[Michael Klingerman]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $425,000
Cash invested: $180,000
Sale price: $1,000,000

1920's Spanish, 3+2 (one full, one 3/4), 1900 sqft house, 7000 sqft lot. It was a very neglected house but solid with a good starting point once it was cleared out and cleaned... unfortunately the previous owner had interior and exterior hoarding issues.

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

I come from a construction and design background. My wife comes from a decorating and interior design background. We thought fix/flip type investing was our best chance at success

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

Found and negotiated with help from a local realtor

How did you finance this deal?

We put 10% down and got a conventional loan for the rest. We immediately put in sweat equity and with some appreciation we were eventually able to get a HELOC to finance the biggest aspects of the renovation.

How did you add value to the deal?

It was a sloped lot and the original home had a garage underneath the house. In the 20's Spanish style, we converted that space along with the other lower level storage areas into a new family room, bedroom, full bathroom and laundry room adding about 700 sqft by connecting those renovated lower areas to the original floor plan with new interior stairs . We updated the electrical, remodeled the kitchen and all exterior space/landscape. There was a detached garage we had to demo and rebuild.

What was the outcome?

We benefited from a growing market and growing area but the finished project was very well received and we thankfully sold quickly for over our asking price. Overall it took us a little longer than expected but luckily it was also our primary residence so that didn't kill us.

Lessons learned? Challenges?

Things can get prolonged. Surprises happen and some delays are not in my control. Using local lumber yards and hardware stores was something I felt good about but it cost us a lot more money... happy it worked out on this one but unfortunately it may not always be possible to use neighborhood type vendors. I still try