5th investment deal - first flip

[Max T.]

Investment Info:

Single-family residence fix & flip investment in Phila.

Purchase price: $102,000
Sale price: $140,000

Small single family home in Port Richmond neighborhood.

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

I had some capital saved up and was looking for a new deal.

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

MLS; used inspection results to get the price down. Owner was motivated as his previous tenant had taken him for a ride on a costly eviction. The property was vacant and he was falling behind on the mortgage.

How did you finance this deal?

Conventional non owner occupied 20% down. I used a HELOC for the down payment and my cash for the rehab, although I could have done it all on the HELOC in hindsight.

How did you add value to the deal?

Reconfigured the layout so that residents would not have to pass thru a bedroom to get to the 2nd bedroom.
Added a dishwasher to the kitchen.
Refinished floors.
Added some ceiling fans.
Cleaned and painted.

What was the outcome?

Sold the property right after finding a good tenant. After rehab costs, holding costs, transaction costs I profited just over 10k.

Lessons learned? Challenges?

Part of me says I should have kept this as a rental. I had just acquired my RE license at the time so I was jonesing to transact. Part of that decision was because I had some trouble finding a good tenant. The property is an expanded "trinity" and has a difficult spiral staircase. This was a turn off for many of the prospects who viewed it and let me to believe that it would be a headache every time. I should have upgraded the electric - I got beat up on the inspection when selling.

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

For the buy and the sell I acted as my own agent.