Recent Columbia, SC Fix & Flip

[Sean McDowell]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $79,000
Cash invested: $69,221
Sale price: $178,000

This was our first flip project. We had a mentor guide us through the process. We learned a lot through the process.

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

We have been primarily buy and hold and wanted a secondary source of capital to fund our buy and holds. Also, the tax benefits of the buy and holds help offset the increased tax consequences of fix and flips.

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

This deal came through our mentor. We determined the ARV, estimated our rehab, decided on our required profit, and then negotiated on the purchase price based on that data.

How did you finance this deal?

We self-financed this deal.

How did you add value to the deal?

This project didn't have any great value adds, but was a great project to start our fix & flip business.

What was the outcome?

We got our required and expected profit that we calculated at the very beginning. We went over budget in some areas and in others we were under. Without a solid plan, fix & flips would be huge gamble. By having a solid plan in place before we bought, we did well.

Lessons learned? Challenges?

We learned at one point to get out of our own way. We were trying to manage every minute of scheduling for the sub-contractors. When we told them what we needed they were able to work it out amongst themselves to stay out of each others way.

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

We worked with a real estate agent for the sale part of the process that came through our mentor.

[Jonathan Greene]

That looks like a win for a first flip these days. DA 20-25k profit at that price point is good for your first flip with any mistakes and overages. I like your lesson learned, but would just caution you to still watch tightly. After thirty years of flipping houses I can tell you that the second you trust the subs completely, things go wrong. You sound very organized for a first-time flipper so it looks like finding that mentor is paying off.