Fix and Flip #11 purchased off market. Medium rehab.

[Gus Muller]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $210,000
Cash invested: $25,027
Sale price: $285,000

Fix and Flip #11 purchased off market. Medium rehab. Drain tiled the basement, new appliances, new kitchen flooring, new basement carpeting, upgrades to plumbing system and gas appliance lines, buff and coated hardwood floors. Ended up roofing it with an insurance claim we had for a hail storm. Purchased the home with two investors backing the purchase and we covered the holding and remodeling costs and did a 3 way split of the profits. Kept it original as it was untouched from the 1950's.

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

This was an untouched 1950's rambler that was in fantastic shape. We decided on a light rehab and offering it affordably. And as a second option, we could have gutted the kitchen and bathroom and listed higher.

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

Found this deal off market on Craigslist. Negotiated it to $210,000 cash.

How did you finance this deal?

I used two private investors, each contributing $105,000 and they made an 8% return on their money in a relatively short amount of time. We covered holding costs and remodeling costs.

How did you add value to the deal?

Updated kitchen flooring, drain tiled the basement, new appliances, new light fixtures, rebuilt sauna in basement, new carpeting, light landscaping, new roof (insurance claim for hail storm), and lots of personal item cleanout and cleaning.

What was the outcome?

Good. We made a decent profit of around $26K with our investors making $8,500 each.

Lessons learned? Challenges?

Don't ever trust anyone working on an original house that you don't want messed with. The drain tile company I hired hacked the knotty pine wood walls in the basement and destroyed the sauna and sauna benches in the basement. I had hired them before with great results, and even met the owner at the project to go over the plan. Came back two days later to a destroyed basement that had to be rebuilt. I didn't pay for the drain tile work, but it took weeks to restore the damage.