My First Deal! The 10 Year Fix and Flip

[Bradley Termeer]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $350,000
Cash invested: $30,000
Sale price: $589,000

This was my first deal! It was supposed to be a short term deal that stretched out to a 10 year headache - complete with difficult tenants, difficult partners, and hidden construction that I unearthed when I was preparing the property for sale.

However, I also learned the value of having a great team. I had a fantastic realtor, an amazing stager, and great contractors who made this difficult house attractive to buyers. I am certainly proud of the final product we created.

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

Initially, I was trying to help out my father. He expanded on original construction but couldn't sell the house due to the housing crash in 2008. I got involved to relieve him of the payments. What got me hooked on real estate was fixing up the house - which had been trashed by our previous tenants. The transformation was amazing and I made good money; I realized this could be a viable business.

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

It literally came to me through my father. I was too naive to truly understand what I was getting myself into but by the time I sold the house, I received a full education in city permitting, project managing contractors, and being a landlord.

How did you finance this deal?

Transfer of title

How did you add value to the deal?

I managed the entire renovation project: I interviewed the contractors, the real estate agent and the stager. I was also the bank. I used a HELOC to provide capital for the renovation and to cover the mortgage during the renovation period.

What was the outcome?

With the help of my outstanding team, I turned a nasty house into a beautiful, airy space that will provide 10-15 of value for a family as they determine whether and how to renovate the space in the future.

Lessons learned? Challenges?

1) Always probe any deal thoroughly, even if the people you are working with are family members. What may appear to be a good deal may have major issues or hidden complications.

2) Always, always, always check a property for outstanding permits, liens, and easements. When I did this deal I was too young to know about this issue and it created unnecessary hardship for me.

3) With a great team, you can do anything.

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

Yes!

Sonja Stedman - Realtor (Denver Metro Area)

Geri Bigum - Owner of Staging Denver. An amazing designer and all around good person.

Bob Bigum - Geri's husband and handyman extraordinaire

Big Bear Carpet and Tile - amazing work ethic and quality work