Live-In Flip - First Home - Done!

[Ed Maione]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $335,000
Cash invested: $50,000
Sale price: $430,000

Our first home and first "investment". Long-term live-in flip. 3/2 Cape that was neglected in a nice neighborhood in a nice town. We went through every room, full cosmetic rehab and finished 150sqft in the basement. New floors throughout, completely new kitchen, two baths, and opened a wall that once separated the kitchen and dining room. Once finished, it reappraised +$95k which unlocked an $85k HELOC to fund the next project!

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

This was 1/2 investment and 1/2 home, satisfied my investment itch and my wife's need for a beautiful home - always a compromise. This project from an investment standpoint was significantly over-rehabbed in regards to the finishes because it is our home. My dad and I did 95% of the labor which is why the numbers worked out. I estimate we could have gotten 95% of the ARV with 50% of the material cost had we made decisions strictly on the basis of ROI.

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

MLS - wasn't much to be negotiated, we saw the value add and did not want to lose the deal over a few thousand dollars. We offered full asking but did end up getting $5k back at closing to help with the out of pocket expense.

How did you finance this deal?

Conventional 20% down. 10/5 ARM 30yr 3.5%. We knew that it was very unlikely that we would be here for 10 years so opted for the ARM for the lower rate.

How did you add value to the deal?

Full cosmetic rehab - almost no outsourced labor.

What was the outcome?

$95k increase in equity resulting in an $85k HELOC

Lessons learned? Challenges?

Wives can be impatient in a construction zone - it gets hard. However, her impatience kept the project moving and she is 100% the reason it is done.

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

Realtor - Deke Mardirossian - Worcester, MA
Mortgage Broker - Paul Walsh - Holden, MA