This ones a jaw dropper! 600sq ft single family close to downtown Kalamazoo. This will basically be a new house when done. All new mechanicals including full electric re-wire, complete new HVAC system, and of course a full exterior paint job! This is a transitional neighborhood so hopefully can sell in the mid to high $70,000’s.

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

House had been on the MLS for months. It was two streets over from our personal home. House was an estate sale but in bad condition and terribly over priced. We offered $17,000 when it was listed for $34,000. Seller came down to $29,000, we countered at $20,000/ Seller tried countering again at $24,000. We said $20,000 take it or leave it. Days later she called back and said she would take $20,000. In retrospect, $20,000 was still too much for the property, but lesson learned!

How did you finance this deal?

Used a private investor for both purchase price and initial rehab costs. We went over budget due to unforeseen structural issues that came out of our own pocket.

How did you add value to the deal?

Every inch of this house was new. All updated mechanicals, flooring, paint, trim work and doors. Brand new kitchen with ceramic tile floor. Bathroom was fully gutted and layout was changed to include a custom tiled walk in shower. Exterior we added fresh landscape, rebuilt the front porch, and added a fire pit area where an old garage had been.

What was the outcome?

Had over 30 showings in 30 days. Struggled to get an offer based on the square footage of the house. Finally received a cash offer for $73,800. Landed at $72,000 after inspection, which happened to be the exact ARV I had initially come up with!

Lessons learned? Challenges?

This was our 4th flip, but also the one we learned the most on. We learned location is key. This is a transitional neighborhood and we realized we probably could hav gotten $5,000-$10,000 more if we had been two streets over. Also, we learned how to do better inspections. We are now pros and spotting foundation issues, termites, etc. Lastly, we learned square footage is key. Don't try to sell a 600sq ft house, at least not in small town America. Just make it a rental!