Largest Completed Rehab Project to Date

[Morris Cohen]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $70,000
Cash invested: $110,000
Sale price: $287,000

This one was a HUGE project, but turned out to have a nice profit. It took me nine months to complete because we had some hiccups with the permitting, framing, etc. but all in all it worked out well. We had to build a garage at the last minute because the house was on he market for a little while. After re-analyzing the data it seemed like although before people were scooping up everything in the neighborhood six months prior, the market changed and buyers were only buying homes with garages. It added to the costs, but in the end this was a strong flip.

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

The margins were interesting to me. Although I have only done $35,000 rehabs or less until now I felt this was a good project to try something a little more ambitious.

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

I purchased this from a wholesaler at the price they were asking.

How did you finance this deal?

I used 100% financing hard money. It was an expensive loan, but given my cash position at the time it was the only way to get it done.

How did you add value to the deal?

We gutted the house from top to bottom. The only thing we didn't do was pour a foundation.

What was the outcome?

We sold the house close to asking and the buyer was extremely satisfied with the end result.

Lessons learned? Challenges?

Expect to hit some bumps along the way and always price in a contingency budget if you are investing out state. Things can come up that you don't expect and you don't want to lose money due to lack of planning.