From Bank Owned to Cash Flow $100,000 + profit in ARV

[Alan Hon]

Investment Info:

Single-family residence fix & flip investment in Micanopy.

Purchase price: $160,000
Cash invested: $140,000

We purchased a distressed, bank owned, property on a lake between Micanopy and Gainesville Florida with the desire to launch our STR business. It was recently given a Market Value of $420,000 and has generated nearly $20,000 in STR income in under a year with little marketing.

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

Having purchased, designed and rebuilt more than a dozen REO's I saw the potential in this one.

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

We were able to work with a local realtor who sent us half a dozen properties that we were able to review. We ran the numbers and saw the potential in this one, came up with a cash offer and locked it down.

How did you finance this deal?

Cash

How did you add value to the deal?

Be able to see the true potential of a property I stood in the space, created a design and got to work realizing it.

What was the outcome?

The property was purchased for $160,000. We invested another $140,000 into it. The ARV was then projected to be $425,000

Lessons learned? Challenges?

The biggest lesson learned on this one was the importance of hiring quality subs. This was our first project in a strange town and instead of using quality labor we trusted the guy next door who stated he was a quality contractor. While he and his buddies wound up delivering in some areas, sadly they fell short on most. We wound up having to fire the neighbor and I rolled up my sleeves and finished it myself.

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

Sadly no. In the end I had to finish this one myself.