First Home - Fix and Flip

[Matt Amundson]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $62,000
Cash invested: $15,000

Currently, have this home on the market at $149,500.

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

Was looking for my first home and wanted to make it into a rental one day. After remodeling it and looking into other houses to buy in the area I decided to list the house instead of renting it after my realtor thought I could sell it for 150k. I am now looking to take those profits and put them into my first couple of rental properties.

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

I found this deal through my realtor at the time and my bid on the house was accepted right away.

How did you finance this deal?

Took out a conventional loan on the house at 62k.

How did you add value to the deal?

- Remodeled the bathroom
- Remodeled the kitchen including taking out a wall splitting the living room and kitchen.
- New flooring in the living room and hallway.
- New front door and garage access door in the front of the house.
- Painted the entire interior of the house.
- Tore out driveway and widened it.

What was the outcome?

Just listed it two days ago and have had five showings so far. If it does not sell I will rent it out at an annual cash flow of $5,280.

Lessons learned? Challenges?

That remodeling bathrooms is a bigger chunk then you want to bite off and have professionals come in right away. Had a professional come in to do all of the plumbing and electrical once I tore it down to the studs, but this was after attempting by myself.

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

I am currently working with Maureen Liebzeit and would recommend her.

[Cody Barna]

@Matt Amundson that's great you shouldn't have any issues since it was your primary residents for over 2 years. If you're single you can claim up to $250k or $500k if you're married. If you've owned it for 5 years and you're still not seeing the appreciation or occupancy that you want, it might be a good idea to look into multifamilies or other SFH in a more desirable area. Whether or not you use a 1031 won't make a huge difference since the gains are tax free either way, however I would recommend speaking with a tax professional for more details.