First Major Rehab and Flip

[Derac Shaffer]

Investment Info:

Single-family residence fix & flip investment in Knox Dale.

Purchase price: $36,660
Cash invested: $12,000
Sale price: $91,500

4BD 1.5BA HUD Forclosure purchased for $36,660. $12,000 in rehab doing the work myself, changing it to a 3BD 2BA. Rented for a year after rehab and sold January 2020 for $91,500.

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

I grew up around a contracting business from a very young age. We were in the market for a primary residence when I found this property and that's when it all hit me. I could kill 2 birds with one stone.

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

The deal was found on Realtor.com. I have a local real estate agent friend who got in touch with the HUD listing agent and got me in on the deal. We negotiated the deal from $42,000 to $36,660

How did you finance this deal?

Conventional 20% down 80% financing mortgage.

How did you add value to the deal?

Full rehab. Changed the layout of the home from 4BD 1.5BA to 3BD 2BA to open the home up and give it a more roomy feeling with a master bedroom and bath.

What was the outcome?

The outcome was fantastic. All said and done I cleared around $40,000 on the property.

Lessons learned? Challenges?

The house was built in 1918 so any real challenge from the contracting side of it was making things look perfect in house that's far from square.