Fix & Flip - shoulda woulda kept it

[Jonathan Small]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $85,000
Cash invested: $52,000
Sale price: $220,000

This was one of my 1st profitable long distance flips. I used my cash to purchase and renovate the deal.

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

This was a late model home on a slab. Great area that appreciated well. Close to a military base.

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

My property manager told me about this deal. One of their owners wanted to sell.

How did you finance this deal?

I financed this deal with my cash so I could close quickly. I used a local bank for renovation budget.

How did you add value to the deal?

We updated the property with LVP, new HVAC, metal roof, updated kitchen, new appliances, new electrical and plumbing fixtures.

What was the outcome?

We sold the property. I wanted to keep it but the rent to purchase/renovation numbers didn't work out. I was all in at 140k and the rent would of been 1300. A cashout refinance based on value and debt coverage would of resulted in more cash than I wanted to leave in the deal.

Lessons learned? Challenges?

Explore additional options that would of allowed me to get my cash out and keep the property. Ex: I could of offered my partner the deal where I would of got my cash out and retained some ownership. Retaining 10-20% of the deal would of been better than 0% which I got after the sale.

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

I used my real estate agent as my project manager. He got a commission when we bought and sold. He also got a project management fee for managing the renovations.