Planned a BRRR, switched to fix and flip!

[Brandi Croom]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $162,000
Cash invested: $22,000
Sale price: $195,000

Attached zero lot line home built in 1984. Did a full bathroom remodel and roof as well as cosmetic fixes.

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

The owner was willing to finance me, I thought it would make a good rental property for my first long distance investing.

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

MLS, it had been on the market for several months. I asked for seller financing and a reduction in the price.

How did you finance this deal?

Owner financing at 5%, about 10% down.

How did you add value to the deal?

Gutted the bathroom and started over. All new flooring and paint. Removed a wall between the kitchen and dining room. Replaced countertops and added blacksplash and hardware to the kitchen. Replaced the roof, added gutters. All new light fixtures.

What was the outcome?

I planned on renting it but I was not happy with the property management and decided I did not want to deal with that from a 6 hour flight away. Also, we found lots of mold in the bathroom that didn't show up on an inspection possibly because it had been vacant for so long. That increased my budget by $5000. I listed it and it sold quickly for a good price. I was in and out of the deal in 3 months.

Lessons learned? Challenges?

Thorough inspections. If it's been vacant, run that water for a long time and get an inspector that has the thermal scans to look for issues behind the wall. Don't rely on a previous inspection. The seller said the wood paneling walls were just nailed up there but then we found out after closing they were glued!! Paid lots to have contractors melt the glue with a heat gun. Next time I'd ask to remove one panel and pay to replace it if I pass on the deal.

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

I was my own Realtor.