My First Fix/Flip with No Money Down

[Uchenna Egwuonwu]

SFR Fix/Flip

Purchase price: $120,000

I'm currently in the middle of my first fix/flip deal with none of my own money in it. I found a property that I purchased for 120k and needs about 40k in repairs. It was appraised for 170k in "as-is" condition and given a 243k ARV.

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

After running rough numbers, I was pretty sure it was a good deal, but not certain. My first thought was to wholesale it. I called my mentor, Jack, who saw the pictures and confirmed to me that it was worth getting under contract immediately and trying to rehab myself. He was willing to be my partner/coach through the deal.

Also interestingly enough, the first real estate book that I read was "The Book on Investing in Real Estate with No (and Low) Money Down"

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

After a short stint in cold calling, I realized it wasn't my natural ability. So instead, I joined Facebook groups and watched for deals. I came across this deal from a wholesaler before anyone else did. I was advised to offer $5,000 below asking, in which they agreed to. I got it under contract that same day.

How did you finance this deal?

When I first came across the property, I made around $11,000 a year between being a full time college student who also plays on the football team. I didn't have much.

I did have good credit, so with that I was able to use a company that finds you credit cards and applies to them for you. I received about 32k. Each card has a 12-18 month interest free grace period. After paying for closing, I’ve used my remaining credit to fund the repairs, which will be reimbursed through draws by the lender.

How did you add value to the deal?

Most of the work is cosmetic. We've planned to remodel the kitchen, add new flooring throughout, do some drywall work, and a lot of plaster work along with some other things.

What was the outcome?

I'm still in the early stages, but expect to have the property on the market by February.

Lessons learned? Challenges?

I learned that communication is key. I explained to the wholesaler that I intended to buy the property, but had trouble finding a lender. It ended up going from a 30 day close to about 60. He was very understanding and got a contract extension between him and the seller to allow me time to find financing.