Seabrook, Texas Tax Pre-foreclosure, short term lease to flip

[Ozzie Ramirez]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $22,000
Cash invested: $26,000
Sale price: $100,000

Distressed seller wanted to get rid of the home. Owed $12,000 in back taxes and wanted to net $10,000. I paid her back taxes and cut her a check for the $10,000. Rehabbed the property for about $26,000, rented it out for a few months, then sold it for cash within weeks of listing it. Net: $40,966.27 according to settlement statement and all supporting documentation.

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

The margins were too good to pass on.

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

A friend form HS dropped this in my lap. She knew I was in real estate and she had a friend that needed money and wanted out of her house before she got foreclosed on. She wanted $10,000 net, I gave it to her.

How did you finance this deal?

Hard Money.

How did you add value to the deal?

Removed a pony wall, replaced all flooring, re-painted, fixed A/C and water heater, got rid of horrible cat smell. I had my kids scrub the garage floors with bleach and push brooms. It took 4 times to get the smell out.

What was the outcome?

Rented for a few months, the sold it. Made a solid return.

Lessons learned? Challenges?

I wish I would have held this property and still owned it as a rental.

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

I represented myself in the transaction. Used an initial lender for the hard money, then re-financed into a long term loan with a Rosegate Capital, Jon Burns.