First Flip - 11017 Rene

[Joshua Kulzer]

Investment Info:

Single-family residence fix & flip investment in Lenexa.

Purchase price: $174,000
Cash invested: $13,000

I bought this property off of a wholesaler. They originally wanted $189,000. I ended up getting it for $174,000. Rehab started at $80,000, but we had to work it down to $60,000, leaving a lot of great changes by the wayside.
We are planning to have it done this Friday, 1/3/2020, listing at $339,950.00.
Hard Money at 12% +2 points and additional fees
Out of Pocket: $13,000
ARV: $345,000
Rehab: $67K ($7K over budget)
I want to make $30K per flip - and at this point, my fingers are crossed!

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

I was eager, and I knew the area. Homes in Johnson County, KS typically sell fast.
I had just met my GC and he referred me to my hard money guy.
I had also gotten on a buyers list at a wholesale firm.

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

Wholesaler

How did you finance this deal?

Hard Money

How did you add value to the deal?

Opened up the wall separating the kitchen from the dining room.
Gutted the entire house
Repaired the foundation
New paint on the interior and exterior
White granite tops in all 4 1/2 baths
White granite in kitchen.
New light fixtures
New hardware throughout... Everything is new.

What was the outcome?

We'll see!

Lessons learned? Challenges?

Have your order of operations scheduled better, prior to starting the work. We needed the roof done first, but the roofer we originally hired flaked. We had to use our backup roofer, which cost us an additional $2300, plus, didn't get done until we were 3 weeks into the project. Same goes for a house with foundation issues. Roof and foundation, you want those done first, if possible.
Know what your money will cost you... at 12%, a smaller house can make you the same profit, except faster.

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

My GC is also an agent, so even though he didn't work as an agent on this deal, I will leverage him on future deals (already in the works). My rule, as long as I feel someone is competent, is that if someone brings you a deal, they are entitled to the commission. If you can't trust someone to do their job, do not use them for important tasks. A bad agent will lose you money. Surround yourself with people smarter than you! Thanks David Greene!