My first Loss, many lessons learned

[Andrew Bang]

Investment Info:

Single-family residence fix & flip investment in Chandler.

Purchase price: $145,000

Cash invested: $9,000

Sale price: $158,000

2009, My first loss. I cut too many corners trying to save money, went with the cheapest contractor (quality of work was poor). Instead of granite, saved a few hundred and did granit-crete. Kept the beige/pink tile because it was in good shape. Looked horrible. Add a weird floorplan, small backyard, and a noisy neighbor that was always outside when a buyer would walk thru equals NO PROFIT.

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

The numbers looked good on it. Even though I didn't care for the neighborhood, the curb appeal, or the layout. I trusted the numbers.

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

Trustee auction

How did you finance this deal?

cash

How did you add value to the deal?

I added cheap upgrades, cheapest I could find.

What was the outcome?

I lost money on the deal. I still look back on this deal and laugh, especially with the granit-crete countertops, they looked so bad, if you were to set a hot pan on them they would melt.

Lessons learned? Challenges?

Buying right is most important, but there are other factors at play. When you cut corners buyers can tell. Choosing the right contractor, ask for pictures of past work and references, actually call the references.