Successful fix & flip Project with some challenges

[Jose Bernard]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $270,000
Cash invested: $89,264.00
Sale price: $399,000

Single Family Flip in desirable neighborhood, 3 bedrooms, 2 bathrooms, and a partially finished basement. Rehab cost $54,565.00, holding costs $10,249.00, and $24,453.00 in selling closing costs. It was a cash purchase. The purchase price and rehab were paid with private investors' capital.

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

The price we were able to negotiate. Also, it was a in very desirable neighborhood with very little inventory.

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

Off market through a Facebook group. The owner had passed away and the owner's children were thinking of listing the property, but they wanted to sell right away. The listing agent who was a friend of the family asked them if they were open to working with a cash buyer investor who can buy the house without contingencies and close in two weeks. We met and negotiated a price that was fair for all parties. Now, I also have a great relationship with this agent as well.

How did you finance this deal?

Through private investors. Regular people who trust me and trusted the numbers on the investment, who were looking for a better return on their money than what they were getting at the bank.

How did you add value to the deal?

We rehabbed the property, updated the kitchen, bathrooms, new boiler, new electrical service panel, and added a French drain system.

What was the outcome?

The property went under contract in the first week $10k over asking, and we closed a month and a half after.

Lessons learned? Challenges?

There was an empty lot next door in which they started construction 2 weeks after. I thought this was going to hurt the sell, thankfully it didn't. Also, the previous owner had a deck which had been on the next-door lot property line. We found this out after we had repaired the deck and added a new fence. These all had to be taken down and redone, increasing rehab cost.Two big lessons: 1. doing more due diligence when buying a property with an empty lot next door. 2. contingency budgets are key