A highly successful fix-and-flip that came from a short sale
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $128,000
Cash invested: $1
Sale price: $201,000
This was a short sale. The house had been purchased as a newly built home for $299,900 in 2006. I negotiated a short sale purchase price of $128,000. I borrowed $160,000 from a busy business owner. I purchased the property with the borrowed money, and then I spent $15,000 of that money on the renovations. I hired a home stager for $1,000. I paid our Realtor 7% commission, telling her to offer 4% to the buyer agent. We had multiple offers, and we accepted an offer above our asking price.
How did you find this deal and how did you negotiate it?
Since I was negotiating hundreds of short sales, the sellers and their agent came to me to ask for help.
How did you finance this deal?
I borrowed $160,000 from a busy business owner. I paid him back the $160,000 plus $10,000 in interest only five months later.
How did you add value to the deal?
I got the remaining debt forgiven for the sellers, and they did not owe any taxes on the forgiven debt. I purchased the house from them, improved it, paid the agents generously, and increased the values in the neighborhood.
What was the outcome?
I made money in five months by spending no money of my own.
