Our First Live-In-Flip

[Cole Jennette]

Investment Info:

Single-family residence fix & flip investment in Lehigh Acres.

Purchase price: $56,000
Cash invested: $25,000
Sale price: $150,000

Live in flip; kind of an accidental investment property; Partnered with a friend who brought cash and then made money through a 12 month finance. We refinanced after 12 months, invested some more cash in the property before selling at the end of 3 years.

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

House was crazy cheap but covered in local government red tape in the form of code violation fees that had accumulated over years ($15,000+). Felt confident I could get that significantly reduced and that it was scaring away other would-be buyers.

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

Found house on Zillow; made offer via our local agent; typical offer, counter offer, final price situation

How did you finance this deal?

private lender (friend); He actually just had a 100k line of business credit that he used; setup a 12 mo loan payment schedule with him, none of which went to principle. We then refinanced and paid him back the full amount of the purchase + rehab costs;

How did you add value to the deal?

I oversaw all the renovations, lived in the house and paid him monthly on his money so he could pay the bank bank for the line of credit; I also took him to lunch periodically and reminded him how awesome and generous he was :)

What was the outcome?

Sold the property at a significant cash out after 3 years and was able to roll that into another live in flip in Arvada Colorado.

Lessons learned? Challenges?

Cash is king even when it's not a quick close.

Local municipalities don't want the money from code violation fines, they want the issues to be fixed. If you come in as an investor or owner and intend to add value to the community and bring a property up to standards, they are are typically very forgiving with the fees that someone else accrued on the property

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

I did. If you are in Lee County Florida, call Leah McCann. She loves what she does and works he tail off. She didn't just list that house, she sold it. There's a big different. She also negotiates like a boss.