Tornado Damage = Big Profits

[Jodi Terrell]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $75,124
Cash invested: $35,000
Sale price: $147,000

This house was a foreclosure with roof damage from a tornado. We made an aggressive all cash offer which gave us a competetive edge against the other bidders. The majority of the expenses went to roof repairs, cleaning up the yard (downed trees), and we had to totally rebuild the chimney! Overall it was a good project with a nice profit at the end.

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

It was a solid house in a high demand area with a nice profit margin.

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

We found this deal on MLS. Because it was a "hot" listing, I knew we probably only had one shot at an offer and I also knew there were going to be multiple offers. We bid well over list ($59,600) because it would still yield high profits. In situations where we may only get one chance to bid, I like to end in an odd number. Sellers (especially if it's a foreclosure) will generally take the higher offer even if it's only a few dollars more.

How did you finance this deal?

Cash

How did you add value to the deal?

We made the necessary repairs due to storm damage, updated countertops, appliances, painted throughout and added some custom features like shiplap walls and built-ins for the mudroom.

What was the outcome?

We walked away with almost $35,000!

Lessons learned? Challenges?

If you are renovating a house during the rainy months, get the outside work done as soon as possible. When we first started this project, the weather was pretty nice. By the time we decided to move outside, the rain started and didn't stop for weeks! We were delayed almost a month because of the weather!