Fix and Flip #2 in La Crosse

[Colin Luz]

Investment Info:

Single-family residence fix & flip investment in La Crosse.

Purchase price: $155,000
Cash invested: $31,000
Sale price: $184,000

I bought this house just last year in September 2022. I suspected from the inspection report that the property was going to need a new sewer line in the near future, so I offered $20,000 under asking and they accepted my offer of $155,000! I got some tenants to move in there by November and had them pay $1,600/month in rent for this 3 bedroom, 2 bathroom while I worked on some minor projects.

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

About 6 months into owning it, the sewer line completely went out and blocked up on me. I had my insurance company come out to see if they would help me pay for this issue, and to my surprise they were able to help and sent me a check for $15,000 to replace it! It ended up costing about $18,000 total, so it was only $3,000 out of pocket for me.

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

This listing agent on this property worked at the same brokerage as my wife and I, so knowing the other agent on the other side of the deal was very beneficial to us in this case.

How did you finance this deal?

ARM 20 year mortgage with a 5.25% interest rate. I put 20% down on this property ($31,000).

How did you add value to the deal?

Replaced the old sewer line with a brand new one, including a new water line that the city paid for since I was already paying to have the street excavated by a company. I also bought a new fridge and door handles throughout the house for it.

What was the outcome?

I was able to obtain and offer for $184,000 cash in July of 2023. I was actually hoping to sell it for closer to $190,000 or so, but a cash offer with no inspection, financing, or appraisal contingency was satisfactory for me!

Lessons learned? Challenges?

I probably should have done some more updates to it and held onto it a couple more years to get a better ROI, but with a new baby on the way, my wife and I were ready to cash out of this one!

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

I was the buyers agent for my wife and I LLC (Luz Family Properties)