Worcester MA, First Failed Flip

[Stephen Beaudoin]

Unfortunately, my first 'Deal Diary' post is a failure, but still better than a loss.

Having received a lead from Craigslist, I followed-up and made an offer which was accepted. The deal was for 120k with an ARV pushing 170k. I saw the property, it was in great shape, and already rented at $950 (low). I figured I'd be able to find an investor if I couldn't do the deal.

After working with a partner, and our back and forth conversations, we get back out there yesterday and two new houses have come on the market throwing off my comps. It's now pushing an ARV of 159k. Not terrible, but there are two of us in the deal, and after tying up all our cash, we wouldn't make enough to be worth it, especially if we had to accept less for a quick sale.

We discussed it for a decent length, and since it isn't close enough for us to rent conveniently, we couldn't do the deal as a team (and neither could do the deal on our own). 

That's fine, we still have the option to assign.

I had tried to get the property with little earnest money since I planned on doing the deal and he had approached me, I didn't think it'd be a hang-up. The seller originally came back asking for 5K, which I lowered to 2k.

Since there was just a few weeks until we figured we'd close, and there is meat on the bone, but only for a single flipper, I couldn't take the risk.

I had to let it go.

I'm actually very satisfied that we let it go and was glad that we didn't get tied up into anything not worth it... it just sucks a little.

Back to the drawing board.

[Stephen Beaudoin]

Just an update...

The house is ours. No longer a failed flip. 

We're dealing with a tenant, hopefully going to go smoothly, he seems agreeable and then onto our minor refresh/update (not a real renovation, just some updating) and we should be good to flip it early October.

Once everything is done I'll keep you posted on the actual numbers of the deal, or message me.