Did not know what I did not know!

[Gary Rowe]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $36,000
Cash invested: $20,000
Sale price: $85,000

3/2 live-in rehab/flip.

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

I had not considered wealth building through real estate investing when we made this purchase. I invested in the property because I recognized that home prices in this area were undervalued at the time, and the subject property was aesthetically the least attractive in a decent neighborhood.

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

We located the property with the assistance of a realtor. We agreed to take the property as-is. It was necessary for us to risk labor and materials making some minor cosmetic improvements to the house in order for it to pass FHA inspection.

How did you finance this deal?

FHA

How did you add value to the deal?

Repainted the exterior and interior of the house. Pulled down the existing wood fence, poured footers and constructed a metal fence around the backyard. Landscaped, added trees. Insulated the attic, removed swamp cooler from roof, re-roofed, and installed central HVAC. Replaced carpet in the bedrooms, and tiled all the rest of the house including showers and baths. Painted kitchen cabinets.

Lessons learned? Challenges?

We did not understand real estate investing at the time or we would have recognized the significant opportunity that was all around us at the time. We proceeded much more slowly with this project than we should have, but of course we able to claim the income tax exemption on the sale of our primary residence.