Buy and hold into fix and flip

[Elaine Mejia]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $280,000
Cash invested: $8,500
Sale price: $340,000

4 bed 2 bath 1900sqft, hot tub, was going to be a buy and hold shifted to a fix and flip 1.5 years in. The market had climbed but rents had stabilized and we were going through the eviction process with the tenant, it was time to reevaluate the investment. We were moving out of the area so more rent would be eaten up by a property manager which would take us out of the 1% let alone the 2% rule, so the financially it made more sense to sell and reinvest the funds into a new project in the area we were going to live in.

I learned more on managing tenants, the process of evictions, the process and plan of evaluating works but did get tweaked. Challenges were in making the decision to evict, it's never going to be easy but it was necessary. I am very glad we made the decision when we did due to the fact that the market has changed in the last couple months and that we were able to funnel the profits into a fixer-upper that we decided to move into while we fix it up. We're saving $350 a month from what we were spending on housing even if living in the house while working on it has its own challenges.

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

Purchased from a family member to help them sell fast while getting a deal and had been looking for a long-term rental.

How did you finance this deal?

70% bank loan, 30% cash