Updated over 6 years ago on . Most recent reply
Laurel, Maryland flip 2019
Investment Info:
Single-family residence fix & flip investment in Laurel.
Purchase price: $375,000
Cash invested: $85,000
Sale price: $585,000
foreclosure bought at auction that had moldy and wet basement--6" of rain with summer storms until we closed. We completely redid the basement-remediate mold, new drywall and studs and added a laundry unit and kitchenette downstairs. Main floor we added engineered planks, new kitchen including quartz waterfall island. 2 nest thermostats, new carpet upstairs and new 4 piece master bath. replaced 4 broken windows.
What made you interested in investing in this type of deal?
we got what we thought was a good deal, the 5% auction fee hurt a little but we got a price reduction b/c of the rain in the basement.
How did you find this deal and how did you negotiate it?
hubs..i'd probably stay away from auction sites but we still made a profit just not as much as projected
How did you finance this deal?
hard money
How did you add value to the deal?
we upgraded lots of stuff on the main 2 floors but the value was the basement. we added a kitchenette and separate laundry unit so the basement could be used as a 2 bed/1 full bath rental since it had a separate walk up entrance. The new owners, if smart could have rented the basement for at least $1000...in retrospect we should have BRRRR this but it was our first deal and we didn't have the funds and experience to flip the loan over to a rental loan. great learning experience for us
What was the outcome?
sold but it took about 2 months longer than expected. we closed in late september, finished construction in late december which was about 3 weeks later and the house got on market in Jan 2019. we got more than full price offer on the first weekend but the appraisal came back at 550 and the contract price was 592K.....we got our own appraisal and it came back at 580k. the buyer decided to pass and it took another couple of months until we got another contract that we felt was best.
Lessons learned? Challenges?
probably should have BRRRR this since it was in a perfect area near highways, shops and between DC and Baltimore but since it was our first flip we wanted to exit the deal and have it on our books.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
we used lending home hard money and it was pretty good