Live and flip or hold for equity to purchase future deals

[Alejandro Ruiz]

Investment Info:

Single-family residence buy & hold investment in Summerville.

Purchase price: $205,000
Cash invested: $15,000

Pre-foreclosure home for my primary residence. Wanted a good location with good school district. Found this property and made and offer after walking it. The house was on the market 6 days and already had 11 offers, I was the 12th offer. asking price was $189,000. Knowing that there was multiple offer on the table, I offered $205,000 and paid closing costs. Knowing the market and the area this was still a good deal. I was all in for $210,000. I am slowly updating and fixing the property and keep it as a buy and hold. I'm building some sweat equity so it can fund future deals for me.

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

it was great price for the location. and I was looking for a good school district for my daughter.

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

found it in the MLS with my agent at the time. I asked him to look for pre foreclosures and houses that needed to be fixed. I saw this property and he did not want to show me because it a pre-foreclosure and it would take too long to close a deal. I fired him and got another realtor who showed me a few properties including this one.

How did you finance this deal?

I was looking for a 203K loan but since this house was in good enough condition to live in it, I did an FHA loan and put down 5%.

How did you add value to the deal?

Still updating a few things like kitchen, floors, bathrooms, curb appeal. Comps in the neighborhood are around $120 - $130p/sqft and I purchased at $91/sqft.

What was the outcome?

Still living in it.

Lessons learned? Challenges?

not all agents are good agents, I fired my agent and it was and awkward conversation but glad I did because the next one was quick to show me this property and wasn't scared of doing extra work in the case it went to a short sale.