Made over 80K on Flip after going over budget by 27K

[Nevin Ashley]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $159,000
Cash invested: $22,000
Sale price: $330,000

1959 Single Family home on 4.2 acres with lake. Complete remodel.

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

This home came up for auction just a few houses down from where I live. Great rural area, with a private lake, but needed brought back to life.

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

My realtor sent to me, and then it went up for auction. It was online auction that I learned I didn't like due I couldn't jump bid by $5,000 or more to make others scare away if wanted. In the end, I got it for under our max budget.

How did you finance this deal?

I partnered on this deal with another like minded couple. We both put in 22k initially and then got a construction loan through my local lender at 5% interest only. We had a rehab budget of 60k and we blew through that and had to put an additional 27K.

How did you add value to the deal?

We completely renovated the home and opened it up. Main floor only had one bath, and we split it made hall full bath and added a master bath on-suite. We had to completely redo the roof, and the garage. The garage was an addition at some point but was poorly built. We completely redid the garage with new footers, garage slab, brick.... Basement was completely redone as well. We knew the market was great so we put more money in, and redid pretty much everything.

What was the outcome?

The house turned out great. We sold it FSBO and has multiple offers within few days, and after recouping our initial investment and the overage on the budget we had to put in, we both profited over 40K. :)

Lessons learned? Challenges?

The biggest lesson I learned through this process is just because I am gone with my full-time job it doesn't mean I need to partner to have someone be there. I am a person who would rather hire the work out and get the project done, while my partner wanted to do more work themselves even when they work a full-time job. Project lasted much longer than it should due to a full renovation on a part-time DIY schedule. In the end, we did great, the house turned out beautiful, and buyers love it.

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

Kristina Rhodes with Michael Reeder Team