Second Fix and Flip Deal

[Jordan Archer]

Investment Info:

Single-family residence fix & flip investment in Port Saint Lucie.

Purchase price: $166,000
Cash invested: $15,000
Sale price: $238,000

Port Saint Lucie, FL - Fix/Flip.

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

I'm a realtor, but got in to real estate primarily for buy/hold with flips as my way of funding.

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

Probate mail. I always offer people 2 options; 1. They can list at full retail; 2. they can take a 70% retail offer if they need the money quickly. They chose the latter.

How did you finance this deal?

I had to scrape together the down payment using a small loan with Marcus and Millinchap; they were able to give me 22k. Once I had the downpayment I used Cogo Capital (hard money) for a 90% financed purchase.

How did you add value to the deal?

I bought with 30% equity, so there was already value. Additionally, I changed the carpet/retiled and painted to get rid of the smoke smell.

What was the outcome?

Bought for 166k, sold for 238k. I was very surprised to see how high the holding costs were though. I only had the property for 4 months and ended up paying roughly 40k in repair, holding and financing costs all together...ouch

Lessons learned? Challenges?

You need to wait 3 months after purchasing a flip to be able to resell to an FHA buyer.

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

Cogo Capital was good along with Marcus and Millinchap if you need down payment help.
I was the realtor involved in selling the property...I'd recommend him too.