Flip in Easton, PA

[Jason Reynolds]

Hey everyone!

I've recently had a few people reach out to me on Instagram, etc.. that found me through some old BP posts I made about deals I was doing. So I decided I'm going to start posting more frequently about the deals I'm doing. I'd love to connect with anyone, whether it's a newbie in my area who needs help with their first deal, or someone who is also a full-time investor. My main focus has always been rentals/BRRRs, but I've been finding that flips are a really great supplement to building a portfolio and I'm looking to scale this side of my business as well. Anyways, here are the details on a flip we just recently sold:

Investment Info:

Single-family fix & flip

Purchase price: $135,000
Rehab Cost: $41,393.18
Sale price: $236,000

This is our P&L below for this property! Rehab costs, holding costs, loans, etc are all under Cost of Goods Sold. The $400 you see left over in Rehab Costs on its own was paid after closing I believe so it didn't transfer to COGS. Property Sales Costs is basically commissions and closing costs when we sold it.

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

A wholesaler sent this deal to me. I made an offer, they countered, I stuck at my price, they accepted.

How did you finance this deal?

Hard money lender funded 90% of purchase and 100% of rehab. I had a private lender in second position bring the 10% down payment and closing costs (roughly $20k)

How did you add value to the deal?

We did a full cosmetic flip on this one, nothing too crazy. New kitchen/bathroom & paint/carpet throughout.

What was the outcome?

$25k net profit!

Lessons learned? Challenges?

I experimented with listing this property slightly higher than I thought it was worth. This was the 4th flip that I was listing in the past 12 months, and the other 3 all had multiple offers significantly above list price within 48 hrs. So I thought there was a possibility I was shooting myself in the foot by being too conservative with my ARVs. I thought the comps showed around $230k for this one, but I listed at $250k. As a result, we did have significantly less showing activity. Within a few days we did receive an offer at list price with FHA financing that we accepted.

We then had an issue with the appraisal because, like I thought, the comps didn't really support a value of $250k even though someone was willing to pay it. So we ended up settling at a sale price of $236k, which was not far off from my original projection of $230k. I think I learned that I was not shooting myself in the foot by listing at a more conservative price, because when there are multiple offers, etc.. we are able to negotiate appraisal gaps if it's an offer way above list price and overall work with a stronger pool of buyers.

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

I listed the property myself, but the hard money lender I worked with was Conquest Funding. They are great and local to the Lehigh Valley. I unfortunately can't give out my private lender's info, but we're definitely looking for more lenders to work with us, so if it's something you'd be interested in hearing about please send me a DM!

[Mathew Pezon]

Great post and deal. Keep the good work. I love working with Conquest Funding. Great company. 

[Frank Del Corso]

Nice project Jason! How did you get the reno done in only 2 months!? I have been thinking about doing some flips to help build my down payments for long term buy and holds but I don't have a solid contractor team yet. I have done 2 renos for 2 buy and holds but those took 5-6 months.  

[Dmitriy Fomichenko]

Nice! Thanks for sharing @Jason Reynolds ! 

[Jason Reynolds]

Quote from @Frank Del Corso:

Nice project Jason! How did you get the reno done in only 2 months!? I have been thinking about doing some flips to help build my down payments for long term buy and holds but I don't have a solid contractor team yet. I have done 2 renos for 2 buy and holds but those took 5-6 months.  

I've been using a GC on my flips. I definitely pay more than if I sub everything out myself, but as a result the projects get done quicker & I also have more time to find deals which is what actually generates revenue.

[Frank Del Corso]

Makes sense @Jason Reynolds, thanks for sharing! Do you attend any local meetups in the Lehigh Valley? I've been to a few of Garrett Rhoads meet ups, which are usually good.

[Jason Reynolds]

@Frank Del Corso I don't go to as many as I should. The only one I really go to is Justin Brown's, I believe he posts it on here so you should be able to find it. I know of a few others that I've heard are good. Feel free to PM me and I can give you info on Justin's or the others