🏚🏡First Flip Success!!!

[Matt "Roar" Gardner]

Investment Info:

Single-family residence fix & flip investment in Crestview.

Purchase price: $73,000
Cash invested: $250
Sale price: $177,000

Great starter flip! Overall, the deal netted $40,000. As my first deal, I utilized an equity split with my investors. I only invested $250 of my own money into this deal ($ to start the LLC and the bank account). Half of the cash came from another investor's SDIRA and another came from an investor's savings. In the end, I walked away with ~$12,000 after only investing $250. :)

The house itself needed everything replaced except for the roof and water heater ~

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

I didn't have the time required to wholesale, but my goal was to raise capital as quickly as possible. Flipping was the next obvious choice. After attending Flip Hacking Live 2018, I was inspired and motivated to crush it!

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

I found it through a local wholesaler, Arianne Lemire, whom I met through local meetups/networking events. She was originally asking for $79,000, but after walking through the house, I offered $73,000, which she accepted! (Side note, she bought the house for $55K, which I knew from the county records. I was completely happy for her to earn her portion in this deal.)

How did you finance this deal?

An investor from Texas reached out to me after I posted a video about Self Directed IRAs on my YouTube channel. He wanted to fund a deal with me for about ~$80K total. Another investor, whom I met through Bigger Pockets, wanted to fund the rehab portion (~$45K). We agreed on an equity split because this was my first deal, I was happy to offer more of the profit for their willingness to bet on me.

How did you add value to the deal?

I brought the deal together and managed the contractors. I also ran all paperwork to make this process completely passive to my investors. They never even entered into the state of Florida, let alone saw the house in person.

What was the outcome?

Overall, the LLC that we created netted $40K in the deal!

Lessons learned? Challenges?

I learned a lot about specific processes to have in place. Timelines are crucial to establish before any work begins! We had some timeline creep at the end, where I had to motivate my contractor to move faster.

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

I was the agent in this deal. I would highly recommend Arianne Lemire as a wholesaler, though. She and Chris (her husband) have a great thing going with core values of integrity and hard work backing themselves.

[Matt "Roar" Gardner]

@Share Ross - Thanks for the kind words :)

@Gbenga George - Yeah, it was a huge win for someone like me who didn't have a lot of cash to play with.  I'll be honest, I spoiled my investors in this first deal.  I was completely happy to do this in my first deal as well.  I knew I just needed to get this first one out of the way before I utilized more conventional lending splits/practices. 

For this deal, I owned a 30% equity in the company after all investors had recouped their initial investment. So from that $40K profit for the LLC, I pocketed about $13,000. I also acted as the Realtor and earned and additional 2.5% on the sale on top of that. I wanted to always factor in a Realtor fee because as I grow, I'd like to be able to hand that duty off and earn some more free time back for myself and my family.