1st Fix and Flip

[Rhonda McDaniel]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $75,000
Cash invested: $2,847
Sale price: $180,000

Converted Single car garage to primary master with bathroom to add around 220 sq. feet.
Repair Costs: $47,610
Holding costs: $6,300
Closing costs: $11,150
Staging Fee: $2,300
Total Pay Out: $37,640

Construction Loan hold back: $29,000
Insurance Claim $12,529 (Roof damaged in Wind Storm) unplanned replacement and tree removal
Bank allowed me to keep my 20% down payment at closing, which would have been $15,000 due to total amount requested for repairs being $44,000.

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

I need to flip a few houses to get cash in. I chose this home because it had value add opportunity. It was down to studs already in the wall between kitchen and dinning area. I knew I wanted to add square footage to and it was there in the the garage.

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

Found it on the MLS myself as I'm a realtor. It was an inherited house. I did a walk through then offered $25,000 less than asking as it needed lots of work and had exposed wires etc.

How did you finance this deal?

Construction loan with local bank and personal loan.

How did you add value to the deal?

Turned garage into a master bedroom with bathroom and walk in closet. Created a dinning room and a dedicated laundry room. The washer was previously located in the kitchen. Turned bedroom by kitchen into dinning room and relocated laundry and gave it a dedicated room. All new bathroom and kitchen. refinished hardwood floors. new outlets and switches and electric box relocated to exterior. fresh paint, new roof, landscaping.

What was the outcome?

I learned from some mistakes but ultimately made over $25,000 on this deal and am already working on my next fix and flip.

Lessons learned? Challenges?

When converting a garage: If you are adding a bathroom you need to raise the floor- extra $4,000. You need to add insulation in attic above garage and in walls extra $500+. I relocated refrigerator but forgot to add the plug in...
I also learned how to do an insurance claim. Do not try to match vinyl plank to wood floor...I did not like final outcome in kitchen, but I was reusing material from a rent house.

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

Yes, I highly recommend ASN Realty Group. They are a Bigger Pockets agent and I am a Realtor with ASN Realty Group. I bought and sold this house.