Completed Renovation/ New Construction Project

[Brandon Sturgill]

Investment Info:

Single-family residence fix & flip investment in Columbus.

Purchase price: $89,900
Cash invested: $34,000
Sale price: $165,000

Fire-damaged property qualified for a new construction loan, so reno costs were 100% reimbursed by the lender. We just worked on a draw schedule and fronted reno costs until each construction stage was finished. There was another property used as collateral which was refinanced when this sold. Their was a partial lien release discretionary to the lender and we walked with around $50k for mainly finance and holding costs as our only out-of-pocket expense.

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

We were doing a lot of flips when it seemed to make sense...we're strictly buy-and-hold now

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

MLS-listed and languished on the market

How did you finance this deal?

Portfolio lender/ Own cash

What was the outcome?

Walked with $50k with our only out-of-pocket being costs to finance the deal

Lessons learned? Challenges?

Flipping houses is silly.

[Adrian Chu]

Originally posted by @Eric P.:

@Adrian Chu Why are they averse to buying the nicest house? Or they can’t afford it with rising mortgage rates?

 Rising rates and also worried that they are paying too much.  

I've seen many homes in the midrange price segment dropping ~15% compared to earlier this year, simply with the absence of a multiple offer bidding war. Like a ~$100k drop on a ~$700k home. Some flippers would end up losing a lot of money if they took 15% less than their anticipated ARV, so many are stuck because they were too optimistic about the market.