My First Flip in NYC

[Gabriel Kolendrekaj]

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Staten Island.

Purchase price: $265,000
Cash invested: $180,000
Sale price: $615,000

First flip my father and I did. An uncle of mine had cash from a long term rental that I had recently sold for him. I found this house for him, he had money to buy the house cash, and could have found a bank to lend him the renovation costs but he asked me to jump in on it with him if my father and I paid for and did the renovation, we jumped at the opportunity.

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

We originally intended on doing a BRRR on the property as it was a large 7 bed 3 bath plus a full size basement that fit an extra 2 beds(not fully legal). But after doing our number we saw our return was around 150k we decided to sell and move into something else.

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

The office I work for does a lot of Foreclosure properties, my uncle had just recently sold a long term rental with me and he asked me to find him a property to buy, this came up 2 days after he closed on the other one and he had to pay 50k above asking to secure the deal.

How did you finance this deal?

My uncle had cash to purchase it outright but was short on rehab funds for the property, which took about 180k. He asked my father and I if we wanted to jump in it with him as partners and pay for and do the renovation ourselves, and of course we said yes. Mind you we only had about 60K between the two of us, so the rest of property was financed through lendingclub, ton of credit card debt, and family subcontractors that were willing to wait on money until we sold the property.

How did you add value to the deal?

We did a full interior gut to the studs renovation, full exterior renovation, dug out the basement and gained about 7 inches, fully finished the basement, added a bathroom in basement, and added a 4th bedroom on second floor.

What was the outcome?

A beautiful 7-9 bedroom property that we managed to get sold with 2 weeks on the market to an investor who wanted to rent it long term.

Lessons learned? Challenges?

This was our first flip and boy was this the renovation from hell. We did not have a full crew to take on this project smoothly. Like the rookie investors we were we decided to give the plumbing work to the neighbor of the property who had worked for a plumbing company for 20 years. As you can imagine it did not go well at all. We switched plumbers midway through, and ended up costing us at least an extra 6k going the cheap route. So we learned, USE REPUTABLE CONTRACTORS!You'll always pay twice.

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

I was the real estate professional, found the deal, ran comps, negotiated marketed...etc