Learning from mistakes

[Alicia Stoughton]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $27,000
Cash invested: $300,000

This is a fix and flip we have been tackling long term. We purchased the property from the County Land Bank following a tax foreclosure, and tore down the back half adding a large modern addition. We are at the finishing stages and plan to list in the next couple weeks.

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

We purchased this property after our first successful fix and flip.

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

We found the property on Craigslist and met the owner at the property. They were asking $39K, and after running numbers, we were comfortable with that. When I was doing my due diligence I noticed that the owner had just shifted to the Hamilton County Land Bank only weeks prior. I contacted the Land Bank directly and they confirmed they were now the owner and thanked me for bringing the issues to their attention. We then purchased from the county, with the support the neighborhood council.

How did you finance this deal?

Cash

How did you add value to the deal?

Large scale renovation. We created a first floor master layout, which is sorely lacking in this historic neighborhood.

What was the outcome?

We are almost there!

Lessons learned? Challenges?

Do full background checks on your contractor. We ran into a major issue with the first one we hired, who came highly recommended from other investors in my network. He ended up doing a lot of shoddy work that we had to pay to have re-done on top of then stealing a large amount of money from us. I now do a lot more due diligence when hiring contractors.