My First Fix & Flip Experience

[Marjorie Carlson]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $186,000

A quirky but charming house in one of Pittsburgh's most desirable neighborhoods was suffering from deferred maintenance and hoarding. 

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

I knew that there was a lot of improvement happening on that street and that there was a shortage of homes in the $400,000 price range. An investment in Sewickley Village would be sound.

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

I am a Realtor so I had access to the MLS, and had heard from colleagues that this particular property was not showing well, so we could negotiate from a strong position.

How did you finance this deal?

Investor

How did you add value to the deal?

The investor is on the west coast and did the transaction from afar. I acted as the real estate agent (for the purchase and listing), project manager, and interior designer.

What was the outcome?

We had a few setbacks, such as some significant issues within the walls that had to be addressed, as well as a total roof replacement. Also, construction went several weeks beyond the target date, and as a result, the market was not nearly as hot as it had been a month or two earlier. Even with those setbacks, investor made a nice return.

Lessons learned? Challenges?

I will be much more involved in managing contractors, because time is money. In my situation, the compensation to investor and myself was based on profit. The compensation to the contractors was set -- going forward I hope to create incentives to get my contractors across the finish line on time and as close to budget as possible.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Janice Patz, Attorney at Law