Dual investment property

[Jennifer Chau]

Investment Info:

Single-family residence fix & flip investment in Newberg.

Purchase price: $235,000
Cash invested: $30,000

This is a property we purchased a bit outside of the Portland metro area to do a combo fix/flip and partition. We are currently under contract for list price and will be completing the final partition approval through the city to be able to build a single family home on the newly partitioned lot.

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

This was a great opportunity because I was not initially looking in this area since it is outside Portland by about 45 minutes but my daughter started attending the University located in Newberg. I became interested in the local real estate market and found it was in high demand due to the college and the world renowned vineyards in the valley. It was on a double lot so we Airbnb'd the house once we flipped it while we partitioned the property so we were able to earn income while we held it.

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

I found it searching RMLS and I came in a bit higher than list because I knew there were multiple offers. It was sold as is because it was a bank owned property but we did our own inspections and a sewer scope to make sure there were no sewer line issues and saw it was a solid house so we proceeded with the purchase.

How did you finance this deal?

We borrowed cash from a hard money lender that was an investor client of ours then purchased it back using an FHA 30 year loan.

How did you add value to the deal?

We had already done fix & flips for other clients that were successful. I know design because I'm constantly in houses and see what works and sells and what doesn't and my husband does the work. I also had already partitioned properties so I was able to do the process myself outside of hiring a surveyor and geographical engineer.

What was the outcome?

We will sell the current home/lot for a 35% profit and be able to own the newly partitioned lot that we build on.

Lessons learned? Challenges?

It was our first experience running an Airbnb so that can be challenging in terms of getting a reliable house cleaner that can get in and turn the beds in a short time frame, having to furnish a property can get expensive if you are not able to find good deals and we are still in the process of a partial release with the mortgage company for the lot.

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

Of course I recommend myself to others as the agent, I refer my husband as an excellent contractor and I work with many good lenders that can offer different types of loan products.