Our First Fix and Flip

[Eric Piercey]

Investment Info:

Single-family residence fix & flip investment in Colorado Spgs.

Purchase price: $180,000
Cash invested: $20,000
Sale price: $280,000

Beautiful remodeled rancher in fantastic central location! This gorgeous property offers main level living at its finest with an open floor plan, wood burning fireplace, amazing wood beamed ceilings and tons of character. New interior/exterior paint, countertops, cabinets, backsplash, sink and flooring, vanities and handicap shower.

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

I met someone socially who was passionate about refurbishing houses and the idea of forming an LLC and being our own bosses was appealing. Researching the prospect led me to Bigger Pockets, and within a year we had fixed up my house, sold it, and began looking for deals. This house was on our list of potentials and ultimately the deal came through.

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

We had looked at many houses with a realtor, and this one looked interesting so we made an offer. The seller was asking 240 originally but had lowered her listed offer to 225. We offered 180, as that was the number we calculated when analyzing the deal and were rejected, however about a month later the house hadn't sold. The offer of 180 was accepted.

How did you finance this deal?

We used a hard money lender and it was expensive. Neither myself nor my partner were able to qualify for a traditional loan, and having no deals under our belts hard money seemed the best option. We just wanted to get going.

How did you add value to the deal?

We kept our costs as low as possible by doing most of the work ourselves. We did hire a contractor both for guidance and help with the more daunting jobs. He's been a great resource, and taught us that we can take into future projects.

What was the outcome?

The house is set to close in 8 days. Fingers crossed.

Lessons learned? Challenges?

We learned a lot about the actual hands on stuff in doing a rehab, namely that every penny adds up and time is important to calculate as well. Money and time should be focused on those things that will add the most value first. Also the order in which things are done is important. Many lessons learned.