$100,000 Profit in Ann Arbor, Michigan

[Joshua B.]

This was a buy-and-hold turned flip. About 6 months ago, I bought two duplexes that sat on one tax parcel (4 doors total). It was an expired listing that was in bad shape. Longer version of the acquisition story is here.

I paid $415k and intended to hold long term as it's in an up-and-coming area with rents already hitting the $1500 range for a 2/1. When I bought it, all four tenants were at the $900ish mark. However, to get rents up to $1500, the place needed over $100k in work. Would've been well-worth the time and effort to do that, as Ann Arbor continues to boom, but life is crazy and I decided now wasn't the best time to pursue that. Plus, I'm of the mind to keep the snowball rolling for now.

The place was going to show terribly and the fact that there were Section 8 tenants would've scared many buyers off. I also didn't want to have to deal with interrupting the tenants for tons of tire kicker showings. So, I got in touch with a handful of the higher producing agents in Ann Arbor and presented the deal. All of them told me it was priced too high, except one of them happened to be looking for a place for himself and he wanted to house hack. When selling off-market, there's always the concern about not maximizing the sales price, so I was happy that all the agents except for the buyer told me it was too expensive.

I was able to sell it for $548k, have the buyer pay for some of the closing costs, give him both sides of the commission for renovations, and walk away with $100,000. He now has a property with a ton of potential. Given the rents in that area, he'll be able to live off rents when he pays it off. Win-win!

Almost under contract on the next flip, which will be my 7th deal in the last 18 months. So happy that I finally took the plunge.