Fix and Flip, Denver Colorado

[Tenzin Gyaltsen]

Investment Info:

Small multi-family (2-4 units) fix & flip investment.

Purchase price: $230,000
Cash invested: $100,000
Sale price: $392,000

This was a Duplex that we purchased for 460K. We put 200K into the rehab, subdivided and split the lot and will sell each unit individually. Together they will sell around 800K total.

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

We love this style of building and the structure is still in great shape. It was exciting that we could blast out all the interior walls without having to do structural work, improve the layout and essentially start from scratch and create two beautiful units we could sell individually.

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

My partner had been talking to the agent owner of the property for a couple years and when he met me, decided it was time to step into the fix and flip arena. The seller knew what they had and because we were willing to finance it with them, they gave us a good deal on the property and left some meat on the bone for us.

How did you finance this deal?

We got creative and did a seller finance deal. We raised 160K total so they could pay of there loan in entirety and then they financed us with a 9% hard money loan (no origination) for the rest including the rehab.

How did you add value to the deal?

We essentially turned them into 2 brand new 2 bed units save for the old sexy brick that we exposed. We did all new everything.

What was the outcome?

Two very beautiful units that appraised for more than our original estimated ARV!

Lessons learned? Challenges?

Stay on budget! What ever you do, get as close to the budget as possible and make sure you have a number for something you needs fixed, even if you don't know what it is. The budget will kill you if you don't harness it.

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

I'm and agent and so is Forrest Johnson, my parter! I definitely recommend working with us, haha. We both work for Madison and Company and would love to help anyone out here in the Denver Metro Area

[Tenzin Gyaltsen]

@Matt J. Thank you very much!  It's definitely a tough and frustrating market at times but when you do find a deal and you do a good job, it's fairly easy to get rewarded for it.  You're right though, everywhere has increased dramatically and people are paying too much for fixer properties which makes it hard to find something worth doing.  Just gotta keep your ear to the ground and ready to pounce!  How is Puget Sound?  It's pretty hot there too, isn't it?