Flipping someone else's flip... Green Valley - Henderson Condo Flip

[Robert Adams]

Investment Info:

Condo fix & flip investment.

Purchase price: $190,860
Cash invested: $198,000

I purchased a condo that had already been remodeled by another local flipper. The workmanship of the remodel was hit and miss. Some things were done well and others were horrible and needed to be redone. Also the water heater was not working which also caused the HVAC not to work as it was on a heat pump system. Since the previous investor was trying to charge top dollar but the unit still needed work and had systems that were not functioning they had a hard time selling it. It had gone in and out of escrow multiple times.

Furthermore, upon more research it seemed that the flipper was leveraged with some form of private or hard money. After sitting on the property for 6 mo+ the seller was ready to get rid of the project. The multiple price reductions was also a sign of this. Original list price of $245k... after many reductions the final list price was $207k. I offered $200k and it was accepted. During due diligence the seller also replaced the water heater and agreed to an additional $5,000 seller credit at closing.

After crediting the commission and seller credit the final purchase price including closing costs came out to just over $190k. Between fixing systems, rehabbing the previous rehab, we spent a little over $5k. Plus a projected few grand in holding costs for HOA, Insurance, and utilities I am expecting the total cash out of pocket to land around $198k.

This property is currently listed for sale for $245k.

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

ARV was high enough I knew I could sell it for more.

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

On MLS...The workmanship of the remodel was hit and miss. Some things were done well and others were horrible and needed to be redone. Also the water heater was not working which also caused the HVAC not to work as it was on a heat pump system. Since the previous investor was trying to charge top dollar but the unit still needed work and had systems that were not functioning they had a hard time selling it. It had gone in and out of escrow multiple times.

Furthermore, upon more research it seem

How did you finance this deal?

Self Directed IRA Funds

How did you add value to the deal?

During due diligence the seller also replaced the water heater and agreed to an additional $5,000 seller credit at closing.

After crediting the commission and seller credit the final purchase price including closing costs came out to just over $190k. Between fixing systems, rehabbing the previous rehab, we spent a little over $5k.

What was the outcome?

This property is currently listed for sale for $245k.

Lessons learned? Challenges?

Properties don't always have to be distressed to be a viable flip.