No Money Down Fix & Flip...REALLY!

[Jesse Martin]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $203,000
Cash invested: $29,764
Sale price: $264,900

The true NO MONEY down Fix & Flip!
3/2 2600sf home...great area full of 4 bedroom homes

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

This was a deal where the owners couldn't sell the property, and didn't want to invest anymore money into the home or keep paying the mortgage.

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

We negotiated the deal by showing them if they sold today for their asking price, thi is the number they would walk away with after all the fees and closing costs. It was the most fair deal for both sides even though the home wasn't selling at that price and we could have potentially got the home for cheaper. We saw the value in the deal, and didn't want to take advantage of the sellers if they would agree to our terms. A lot of the times, terms are even more important than the purchase price

How did you finance this deal?

This was owner financed by the sellers with zero money out of our pockets if we would just take over the payments. We wrote up contracts for them to carry for 3 years, but trying to resale in 12 months where they would make their money at that time on the sale. Did everything through the title company where the payment was directly made to the lender not the seller

How did you add value to the deal?

This was a HUGE 2600sf foot home that was only 3 bedrooms. By turning this home into a 4 bedroom it would increase the value, as well as making it easier to sell. We fully enclosed an area in the large living room adding a closet and french doors. We also did a lot of remodeling on the property. Full repaint, brand new LVP flooring and carpet throughout the home. New granite in the bathrooms, toilets, sinks, and fixtures. New New New it really turned out awesome!

What was the outcome?

Here are the numbers:
Purchase price: $203,000
Remodel Costs: $26,658.60
Holding Cost: $3,105.59

Rented the property to the buyers for approximately 8 months with a profit of: $3,319.86 after expenses

Sold: $264,900 - under market value for a quick sell

Total Profit: $34,695.68

Lessons learned? Challenges?

Hire the right contractor! It all turned out fine, but on this deal we had a lot of babysitting. Get a better disclosure fromt he sellers when they "Claim" to have repaired a shower leak...

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

No