First Fix and Flip. Eye-sore SFR into beautiful home.

[Nathan Sharp]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $78,000
Cash invested: $59,000
Sale price: $137,793

4/2/1 SFR had sat vacant for 10 plus years since the previous owner had passed away. It's only occupants in that time were small mammals and insects.

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

I was looking to supplement my W2 income and get my feet wet with real estate investment. I underestimated the depth of the water and its contents.

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

Wholesaling company that I had first spoken to a couple years prior and had been on their email list since. I paid them what the were asking.

How did you finance this deal?

I purchased the home and paid for the rehab with a combo of cash and lines of bank credit and consumer credit cards. I love my Home Depot CC and it's 0% APR!

How did you add value to the deal?

Full rehab. AC, electrical, kitchen, baths, roof, floors, paint, appliances, etc. I personally spent about 20 hours crawling through the attic on hands and knees with trash bags and a shop vac, removing critter pee-soaked insulation, rodent poop, snake skins and a dead squirrel. Can't recommend the experience.
Growing up, we had no mature trees in our yard. I always thought I wanted big trees. Clearing a half acre of overgrowth and fallen limbs by myself made me reassess this desire.

What was the outcome?

After an extensive rehab that went way over budget (both in terms of time and money), roughly 600 hours of mine and my wife's time, and some hard lessons learned, we listed the property and managed to sell for top market dollar. We managed to barely break even. After the sale, I looked at where in process I could have saved money. I came up with roughly $12k that could have been profit had I gone about things differently.

Lessons learned? Challenges?

Don't put the time-pressure of high interest credit on yourself when you have a lot to figure out. Prime example: I rushed into accepting the second GC bid I received.The GC we went with estimated the rehab time at 4-6 weeks. He took 13 weeks. This alone had a serious hit on profits due to how I had financed the deal. Had I a clearer idea of what I needed in a GC and taken a couple more weeks to settle on one, this process could have been much less painful and more lucrative.

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

My wife! Dominique Sharp is a top notch agent and I can't wait to see her achieve massive success as she progresses through her career. My approach of throw a lot of money and hard manual labor at the problem would have almost definitely resulted in a massive loss if it weren't for my wife. Her choices in design and decor resulted in immediate interest from lots of buyers, and the fact that she had just received her real estate license allowed us to avoid paying a seller agent fee.