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Updated almost 5 years ago,
Franklin, Massachusetts - Live in Flip
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $335,000
Cash invested: $50,000
Sale price: $430,000
Our first home and first "investment". Long-term live-in flip. 3/2 Cape that was neglected in a nice neighborhood in a nice town.
What made you interested in investing in this type of deal?
We wanted to buy a home, make it ours, and make money - simple as that!
How did you find this deal and how did you negotiate it?
MLS - paid list price and only asked for $5k back at closing. We knew it was a good deal and wouldn't last long.
How did you finance this deal?
Conventional 20% down bank loan
How did you add value to the deal?
We went through every room, full cosmetic rehab. As a disclaimer, I (and my dad) did 90% of the labor so there were significant cost savings on that end. New floors throughout, completely new kitchen and two baths and opened a wall that once separated the kitchen and dining room.
What was the outcome?
Once finished, it reappraised +$95k which unlocked an $85k HELOC to fund the next project!
Lessons learned? Challenges?
- Owner-occupied single-family homes are only TRULY assets if you can add significant value in a short period of time.
- Your wife will get sick of living in a construction zone very quickly
- The amount of work you get done in the first month will be about as much work as you get done in the next 11, the fun wears off...
- In the end, financially worth it and the satisfaction of having completed it is priceless.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Buyer's Agent - Deke Mardirossian out of Worcester, MA. He was a great help and now a good friend helping us look for our next project. He is also an investor & landlord in Worcester. Highly recommended.
Mortgage Broker - Paul Walsh out of Holden, MA. Works with Deke very often so the relationship is very streamlined. If you have a pre-approval from Paul, your financing will not fall through.
