How I Made $62,000 by Buying another Home!! - Intelligent Investor Alert!

[Geoff Cavender]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $60,000
Cash invested: $130,000

Our First Flip House!! This one has an AMAZING Story on how I purchased it! This home was for sale for $110,000. I did a walkthrough with my Contractor, and the numbers worked at $110,000. I still tried hard to negotiate a deal, and these people would not budge at all. So I ended up with a signed agreement at $110,000 with a 25% Conventional Loan. Then shortly after going under contract another home in the same neighborhood, same condition, and the same size came up for sale for $60,000. I knew if I bought it cash before the appraisal on the $110,000 house that it would cut the appraisal! I put that home under contract at $59,000 cash, closed in a week before the appraisal. Then the appraisal on the $110,000 happened, and came in at........ $60,000!!! The best part is, the Sellers agreed to just drop to the the appraised price!! So I saved $50,000 by buying another flip, and then I land contracted that one to my Contractor and made another $12,000 on that deal as well! We have learned so much on this flip and will be listing it after the first of the year!!

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

I bought this home as a Christmas Gift for my Wife who has always wanted to Flip Homes

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

This home was for sale for $110,000. Then shortly after going under contract another home in the same neighborhood, same condition, and the same size came up for sale for $60,000. I knew if I bought it cash before the appraisal on the $110,000 house that it would cut the appraisal! I put that home under contract at $59,000 cash, closed in a week before the appraisal. Then the appraisal on the $110,000 happened, and came in at........ $60,000!!! The Sellers agreed to drop to the new Price!!

How did you finance this deal?

25% Down Conventional - HELOC on primary for some of the rehab - LOC on 5 plex for some more of the rehab

How did you add value to the deal?

Negotiations - Complete remodel

What was the outcome?

A fully flipped home, about to be listed, and a second home land contracted

Lessons learned? Challenges?

I could write a book on the lessons we learned with our first flip! Contractor Issues/ Inspections/ ARV

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

Myself