Investment remodel with appraisal concerns

[Henish Pulickal]

Investment Info:

Single-family residence fix & flip investment in Spring Valley.

Purchase price: $300,000
Cash invested: $80,500
Sale price: $445,000

2 story condo features: Brand new flooring, AC, counter tops, new cabinets, beautifulbacksplash, fireplace, newly remodeled kitchen & brand new stainless appliances. Laundry hookups are inside the unit. Large master.

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

It was direct to seller and the property was in bad condition. The uglier the better in our business!

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

We found this distressed seller, negotiated a short sale with his bank and the seller received $10k for relocation!

How did you finance this deal?

Credit line and private money

How did you add value to the deal?

Cosmetic remodel, new kitchen, baths, flooring paint, light fixtures, and exterior fence.

What was the outcome?

It sold and we made money!

Lessons learned? Challenges?

When I was in the process of purchasing the home I knew that the appraisal when I sold it would be an issue due to lack of comparable sales in the area. After receiving multiple offers, Ichose the buyers with the largest down payment, using conventional financing and seemed to have the most reasonable/seasoned realtor. Their offer came in at $450k. But their appraisal came in at $420k. The buyers wouldn't go past $425k. I canceled with them and got a new buyer that closed at $445k.

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

Brent Edwards, the buyer's broker, was great.