My First Fix & Flip Investment

[Dan V.]

Investment Info:

Single-family residence fix & flip investment in Norfolk.

Purchase price: $118,000
Cash invested: $40,000
Sale price: $263,000

Contributors:
Sierra Alderman

This is my first fix & flip project.

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

I am an accountant by profession and seeing the numbers of my clients in real estate made me interested in real estate investing.

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

I found it thru MLS. There's actually 2 of them on the same street across each other and looked at both. I liked the other property better but the seller accepted an offer before we made ours so I ended up making an offer on this property and got accepted. The property was on short sale, initially offered $121K but was able to lower it to $118K after further negotiation.

How did you finance this deal?

Private money lender for the DP and hard money lender for the purchase & rehab costs.

How did you add value to the deal?

I'm not sure. I guess, I tried to stay on top of it make sure we are on track, though we still ended up over budget and delayed (blame it to COVID). Or maybe I'm good in picking the right team member?

What was the outcome?

Despite overbudget & delay, I still ended up with the same profit I was expecting when I bought it. The property turned out nicely, I think.

Lessons learned? Challenges?

Lessons: Review the inspection report (if you have one) and make sure the scope of work covered majority of the findings. I lost the first offer due to issues in the crawlspace that was not handled by my contractor. Keep track of the project and adjust accordingly, we have to move around the budget to stay on track. Focus on rehab/upgrade that will add value to the property.
Challenges: Due to COVID, we had delays on some of the materials and inspections.

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

Yes