Fix and Flip in North Phoenix, AZ 85022

[Cara Lonsdale]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $150,000
Cash invested: $25,000
Sale price: $222,500

Moderate rehab with mostly cosmetic items including tile flooring, refinished kitchen counters and bath tub/showers, new bath vanities, all new light fixtures, new hardware throughout, and refreshed landscaping in front and in back. Painting inside and out. This property sparkled like a shiny penny when we were done with it. Listed on MLS with professional photos with virtual staging and had an offer in hand within hours. Highest recorded sale up to that point was $198K. So, the $222,500 price point was aggressive, but with the right marketing and right touches inside, the property rose to the top and closed with no issues or threat of low appraisal, establishing the new highest comp in the neighborhood.

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

This was a property in a hot price point range that I knew would be easy to make beautiful for a new Buyer. It was also small enough (1,056 sq ft) that materials would not be expensive, and we could do nicer finishes. The community was near a mountain trail head, and shopping dining. I always look for a "hub" nearby any property I would consider.

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

When people tell you there are no deals on the MLS, that is NOT TRUE! This property came on MLS. It was a probate/estate sale. I called the agent immediately and had an offer in his hands within the hour. By the next morning, the agent had 19 other offers, but because I was first, and had talked to him about the deal, had assured the Seller I wasn't going to ask him for repairs or concessions, and was cash (hard money), the Seller took my offer.

How did you finance this deal?

I used a hard money lender that I work with on these types of deals. They can close in as little as 24 hours, and take very little to get me terms. It is a streamlined process, and easier every time since we have a working history.

How did you add value to the deal?

The marketing is KEY! Building anticipation is so important. We had the front yard complete and the exterior painted very soon in the process so that the curb appeal was already there, even though we were still working inside. Also, having professional photos with the use of virtual staging is a way of adding champagne to a beer budget.

What was the outcome?

Sold within hours of being on the market.

Lessons learned? Challenges?

I did learn that going to physically walk the property before making the offer was crucial to the Seller's consideration of all the offers in hand. So many investors make blind offers only to pick and choose, and then discard the rest. When the competition is steep, you have to make sure you complete all the basic steps.

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

I am a Realtor, so I listed the property on MLS.