My First Deal - Live and Flip

[Patrick O'Connell]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $295,500
Cash invested: $45,000
Sale price: $401,500

"Live in Flip" - Put 10% down, wrapped some of the closing costs into the 30 yr fixed mortgage, invested about $15,000 into rehab costs. Hopefully you can guess which pictures are the before and which are the after. Also, waited 2 years so I would not have to pay capital gains since it was my primary residence

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

This was my first time buying and wanted to start with a "Fixer Upper" I could build equity in. I was renting in Boston and looking to get back to Framingham which is my hometown. It was the best of both worlds to be back around family and have this opportunity - Plus my father is pretty handy (Master Electrician) which makes for cheap labor as long as there is a Ice Cold beer around for after...

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

I used my agent to find this deal - Diane Sullivan (Framingham/Metrowest MA). The asking price was $320k and I held strong at $295k. I also used the Inspection Report to negotiate ways to pay down the closing costs.

How did you finance this deal?

Saved up enough to put down 10% for a 30 yr conventional loan. I even wrapped some of the closing costs into the mortgage however this effected the rate. (Increased .25%)

How did you add value to the deal?

Ripped out the Carpets & put in New Floors
Baseboard
Paint
New half bathroom
New Vanity and Toilets for the full bath.
Mostly Cosmetics... Also added new windows and new front door.. I took down a tree in the back yard which really opened it up as well as some dead trees in the front to help the curb appeal - I truly think this added value. There is a beautiful Red Maple which sat behind those dead trees and by taking them down, it really let the Red Maple show.

What was the outcome?

I ended up selling the property January 17th 2019 - I bought on Jan 15th 2017 meaning I do not have to pay taxes. I used the money to then purchase a duplex which you can see on my page as well as pay off my truck so I would not have additional monthly payments.

Lessons learned? Challenges?

Always factor in closing costs! Being new to this all 2 years ago, I was in shock when I saw a bill for $8k.

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

Agent - Diane Sullivan (Framingham/Metrowest MA)