Live-in flip in South Jersey via HUD Homestore

[Anthony Sinigaglio]

Investment Info:

Single-family residence fix & flip investment in Penns Grove.

Purchase price: $45,000
Cash invested: $8,000

Live-in flip purchased via HUD Homestore.
Purchased for $45,000
Repair budget $25,000
Approximate ARV $150k-180k

Currently a 3br / 1.5 bath, which we are converting to 4br / 2.5 bath.
HUD Homestore requires us to live in the property for at least a year, so we're planning for 18 months total to get it on the market.

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

The need to establish capital makes this hometown live-in flip a great option. I knew that buy-and-hold would suck up my capital and leave me stagnant for quite a while. After this property sells, we will look to purchase a duplex or triplex.

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

I found the deal via my realtor, who alerted me as soon as it became available. I brought my dad in as a partner; he has the knowledge, I had the credit / down payment, and we both have the hustle. My bid wasn't initially accepted, but when the first buyer fell through, my realtor gave me a call.

How did you finance this deal?

I took out a loan on my 403(b) retirement account at 6% interest (4% goes back into my account). I got a conventional mortgage at 4.65%. I started with roughly $8,000 in repair funds available, but with my parents moving in with me, we will be able to rent out our childhood home for a monthly cash flow of $550, which will be directly funneled into rehabbing this new property.

How did you add value to the deal?

My credit score is great, and I've been doing a lot of self-educating via BiggerPockets, local meet-ups, various podcasts and books, and networking with great local investors.

What was the outcome?

TBD, but we expect to profit around $50-60k when all is said and done.

Lessons learned? Challenges?

I'm learning a ton as I go. My dad has a lot of general construction and maintenance experience, and he brings quite a few connections to the table as well. One thing I will suggest is to always be on your game. Time is worth more than money, so meet your deadlines, keep your bridges burn-free, and go kick butt!

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

Realtor: Joe Venello, American Dream Realty (Carneys Point, NJ)
Mortgage: Oak Mortgage, a branch of Republic Bank