My favorite North Carolina Home Flip

[Thomas Magill]

Investment Info:

Single-family residence fix & flip investment in Cramerton.

Purchase price: $39,000
Cash invested: $76,000
Sale price: $189,900

This was one of the most challenging and rewarding projects I've completed to date. It took about 7-8 months to source and close on the property which had 25 heirs. Most of the main living space floor, sub floors and piers were damaged beyond repair and needed to be replaced. I had to change contractors midway through the project. But, in the end, the product/investment was worth the wait.

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

The character of the home. The home was in bad shape on the inside, but the exterior wasn't bad. There were a couple cost effective moves that needed to be made on the outside, ie new roof and gutters that completely changed the homes curb appeal.

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

I went to look at another property in this neighborhood and this guy was sitting on his porch and called me over. At first, he asked if I wanted to buy his home, which was in really good shape, and I declined. He then explained that his family owned a home a couple blocks away and that he would show it to me. He was 1 of 25 heirs on the property and was not one of the original heirs and could not negotiate terms. I eventually spoke to the right person and agreed to a price.

How did you finance this deal?

I purchased this property in all cash.

How did you add value to the deal?

I added a jack and jill bathroom between bedrooms 2 and 3 as well as a master bathroom. The original home was a 4/1 that I turned into a 3/2.5.

What was the outcome?

The original contractor relied heavily on one foreman that injured his back on the property just prior to mine, so the GC had to scurry to find workers which delayed the progress. Eventually, the GC and I came to an agreement that I would take over the day to day and hire my own subs to finish.

Lessons learned? Challenges?

I have a rule to never provide a deposit for any reason on a project. Unfortunately, I broke that rule on this project because the GC came highly recommended. I will never to that again, ever. It took forever to have the GC "work off" the original 8K that I paid him.

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

Im a broker, but I did work with a lovely RE broker who represented the buyer and worked very hard to get the deal done.