My first flip (South Daytona FL)

[River Fuller]

Investment Info:

Single-family residence fix & flip investment in South Daytona.

Purchase price: $65,000
Cash invested: $15,000
Sale price: $125,000

This was my first flip that me and my brother purchased. It had 4 tenants in it, grossing 1700/mo. We slowly fixed it up (side project), using mostly the tenants money. As we fixed it up and removed the month to month tenants, we airbnbed it to take advantage of bike week and biketober fest as well as the good rental market in Daytona. We ended up netting about 35k on this property and it was a lot of fun!

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

I have been interested in real estate for as long as I can remember. When I was 12 my brothers were reading and listening to Robert Kiyosaki and guys like that. I was always saving money and making small investments (flipping anything I could on ebay, craigslist, etc) so I always had some cash laying around. My brother had a lease option on this property and asked me if I wanted to flip it with him almost 2 years ago. He was short on cash because he had other deals going, so I came in.

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

My brother found it driving for dollars and sent a letter to the owner. It started as a lease option and my brother fixed it up slowly while he lived there and rented bedrooms. It's a 3br 1ba, but there was a big laundry room that was converted into an extra bedroom. My brother negotiated it down to 67k, because it needed a decent amount of work.

How did you finance this deal?

We used a private lender, 5k fee, 12% interest only, 3% pre payment penalty. Steep fees and interest, I know, but I had not the best credit and didn't have a high enough income to get a loan, I just had savings.

How did you add value to the deal?

For the exterior: we painted the trim on the outside, pressure washed the vinyl siding, cleaned the exterior really well, mulch, new mailbox.

Interior: refinished wood floors, new carpet, new vinyl tile in kitchen and bathroom, new toilet, new kitchen cabinets, counter top, sink, painted the interior with a modern color scheme, added a door to the back porch.

We shopped around for cheap contractors and cheap materials, even used materials in some cases. Rehab was roughly 7k.

What was the outcome?

35k on the sale, and around 2k cashflow, place a nice place to crash from time to time while working!

Lessons learned? Challenges?

I learned a lot! A lot about dealing with people, how to do drywall work, how to replace a toilet, how to find cheap materials. The challenges were running out of cash, trying to juggle life while doing this deal, I learned a lot about that. I learned that if I want to do well in real estate, it needs to be my main focus and I need to work a lot harder. Since then I have made necessary adjustments and have really picked up the pace.