First Fix & Flip investment

[Maurice Selva]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $340,000
Cash invested: $127,000
Sale price: $517,000

We purchased this home as a divorce sale. We did a full rehab on the inside and outside doing new paint inside and outside, new plank flooring, remodeled the kitchen and both baths, blew open the floor plan by eliminating some walls areas, redid some of the ducting for the HVAC system, new lighting throughout, front and back landscaping, leveled the floors, updated the light switches and outlets throughout and removed a fireplace that was badly damaged in an earthquake. Since I am a realtor I was able to list in only having to pay the selling agent commission. My partner is a GC so with sweat equity we were able to save a few bucks on some labor costs.

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

Just got through attending flipping seminar in las Vegas and were excited to get started

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

My partner found it by overhearing a guy that he knew at a fish store that he frequented that he was going through a divorce and needed to sell his house so that he and his wife could go their separate ways. We negotiated the deal by going to the house face to face with the both of them offering exactly what our formula told us to offer.

How did you finance this deal?

We financed it by using funds from my self directed IRA, funds from a heloc and a majority from hard money that one of my friends had introduced me to.

How did you add value to the deal?

Upgrades like granite countertops, barn door doors, paint, kitchen and bath remodel, moving walls, paint in and out, opening door from living room to garage, landscape improvements and sweat equity.

What was the outcome?

We were able to make some money, pay a majority to uncle sam and learn a ton.

Lessons learned? Challenges?

Use more of other peoples money and less of mine. That I need to shop for more favorable financing terms. Start looking for new deals before you existing deal is complete.