Extreme fix and flip with owner finance.

[Sergio Chávez]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $117,500

Cash invested: $85,000

Sale price: $240,000

Bought a 2 bed, 1 bath distressed house, seller carry 95% of the purchase price at 4% IO, rehab cost $85,000 including an addition of a master bedroom and a master bath about 300 sq ft of new living space.
90% of the house is new, roof, siding, subfloor, windows, sheetrock and texture, electric, floor coverings, kitchen, Air conditioning unit, front porch, garage, paint, etc, etc.
Very satisfied with this project, good numbers...ROI 35%
Neighbors, and city inspector are happy as well.

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

It is challenging, most investors do not like houses in this bad condition, I love them!

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

I look for abandoned houses, reach the owner and offer him a win win solution.

How did you finance this deal?

Purchased with owner finance at 4% IO, and used OPM to fix it.

How did you add value to the deal?

Building a 3rd bedroom and 2nd bath, updated everything on the house with quality craftsmanship.
I always spend a little extra money on quality finishes and a good paint job, that sells.

What was the outcome?

Satisfying.

Lessons learned? Challenges?

Toooo many surprises during the process, I chose to repair everything as needed and deliver a nice house even-though less money to be made at the end.
Always use this way of thinking, cutting corners always gets back to you in different ways.... Low appraisals, bad inspection reports, Buyers canceling escrows, or even lawsuits.