Family Equity Investment

[Pamela Morrison]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $150,000
Cash invested: $10,000
Sale price: $207,000

This property was purchased during the big market downturn. We used a hard money lender to avoid the banks. It was a relatively new, basic, builder grade 3/2 home with 2100 sq. Ft. It had a loft space at the top of. The stairs with a closet that we enclosed into a 4th bedroom. Added recessed lights, painted all the honey oak woodwork, vanities, and cabinets a lovely espresso (in at the time), neutral paint throughout, and new flooring (carpet, travertine, hardwood). My husband is a contractor and was able to do a majority of the work. We spent about $10,000. Lived in the home for 3.5 years. Sold to first people that viewed.

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

We needed a family home and wanted to find a fixer upper to gain equity.

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

There were many houses that were on the market. But the bad part was they were all short sale. Any privately owned homes on the market were priced too high. The foreclosures were hard to find because they would sell in a day or two. We looked at about 40 houses and made offers on several.

How did you finance this deal?

Hard money lender

How did you add value to the deal?

The house was builder basic and was about 7 years old. Painting all the woodwork, cabinetry, and vanities changed the home completely. We also added recessed lights, new flooring, and paint throughout. The best part of his house was being able to easily add a 4th bedroom. I love finding houses where there is space to add bedrooms or bathrooms.