Flipping a REO Property

[Patrice Boenzi]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $214,500
Cash invested: $58,000
Sale price: $379,900

Purchased from the Credit Union as a foreclosed home.

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

Properties to flip where hard to find. This one sort of fell in our lap. We were in the middle of another flip, but knew we could not pass this one up since the numbers worked. We figured out a way to buy this one while flipping the other one.

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

Realtor altered me to the home. We won in a multiple bid situation. In this case, our lender was the what pushed the scales in our favor and we closed in 3 weeks.

How did you finance this deal?

FHA financing with 3.5% down

How did you add value to the deal?

The whole place was touched! We added flooring, cleaned up, added windows, gutters, kitchen, bath, and we always do something a little bit over the top in the deign.

What was the outcome?

Sold in two days at full list price!

Lessons learned? Challenges?

Lessons learned =
A foreclosure is not always a better deal.
A home with deferred maintenance costs more to bring up to speed.
DIY former owners cost you more money.

Challenges =
Undoing what the DIY previous owner did.
Living in this type of flip was hard.

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

Realtor and Lender