Second investment 1st FixNFlip deal

[Enrique Hernandez]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $45,000
Cash invested: $80,000
Sale price: $149,000

Purchased for $45k. Negotiated a 2 year $15k owner financing at 0% interest. Took me 2 years to completely gut and re do everything in the house. Learned that hired labor is the highest cost when rehabbing or fixing up to flip.

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

Always loved to work with my hands. Had studied civil engineering and worked at a few engineering firms before so I had a background but really wanted to be out and about working with my hands. Fix and flip for profit was kind of a no brainer since I could do all the work myself.

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

Used redfin to locate the deal. In the area I lived the properties were too expensive (Watsonville CA) so I began doing farther searches out of my area. Finally came across this one in the small but growing town of Coalinga CA. Used the listing agent to represent us both. I partnered with a friend on this deal, he put up $20k and his contractor knowledge and I the rest of the money to complete the work.

How did you finance this deal?

Purchased for $45k. Negotiated a 2 year $15k owner financing at 0% interest. Used $20k from a partner and the rest I sourced along the way.

How did you add value to the deal?

It went from a rundown home and outdated in every aspect to an up to date property that I rented for 2 and a half years then sold

What was the outcome?

After 2 years of work on weekends and holidays we rented the home for another 2 and half years then sold it. The sale proceeds allowed us to acquire two duplex properties.

Lessons learned? Challenges?

HUGE lesson learned!!!! When changing out a window for a bigger one, be certain to know the city codes. I was red tagged and ordered to pull permits and have the home inspected. The initial plan was to do minor cosmetic things and bring the kitchen and bath up to date but not knowing this fact made our $5,000 budget go to $50k costing us the two year full rehab. Inspector said "If I see it you need to fix it!" Ooops

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

Absolutely!! Teresa Fernandez with Fernandez Real estate in Coalinga California