Partnering on an out-of-state flip

[Brad Noe]

Investment Info:

Single-family residence fix & flip investment in Evansville.

Purchase price: $85,000
Cash invested: $35,000
Sale price: $141,000

Contributors:
Katie Noe

This was our second flip working with the Schlag Brothers out of Evansville, IN. My wife Katie and I are in Louisville, KY, an over two hour drive from Evansville, and we trust the Schlag's so much that we never even saw this property in person! The Schlag's found the deal, and we provided the funding source through SurePoint Equity, a local hard money lender. We paid out of pocket for the down payment (which was 10% of purchase price) and the Schlag's did the rest!

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

Hard to turn down a chance to earn a 25% return without having to lift a finger.

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

The Schlag Brothers, Aaron and Andrew, sourced this deal for us in their hometown of Evansville, IN. They are active full time investors in both the Evansville and Louisville markets, where we have worked with them on many occasions.

How did you finance this deal?

Through hard money lender SurePoint Equity out of Louisville, KY.

How did you add value to the deal?

My wife Katie, being a rock star real estate agent and house flipper, lent the Schlag's some of her expert design advice.

What was the outcome?

Due to a bad contractor, the project was derailed and took about two months longer than it probably should have. We still were able to net a healthy profit, however.

Lessons learned? Challenges?

Keep close tabs on your contractors, even the ones that you have worked with many times before. You never know what is going on in their lives that could cause them to take a drop in performance.

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

As always, @Katie Noe of Commonwealth Homes Group - Keller Williams Louisville was excellent. She is an extremely competent Realtor that saves and/or earns her clients more money with an attention to detail on every deal from start to finish. She also is an experienced house flipper and home remodeler with a keen eye for design.

[Ross Denman]

Awesome. I've done JV deals with some of our OOS clients in Indianapolis and I think that it's a solid way for investors to capture some decent gains while offsetting some of the risks of investing from out of state.

Managing contractors is one of the more difficult aspects of flipping whether your local or OOS... you just have to keep them on a short leash.

Congratulations and Keep it Up!