A flip in the time of Covid-19

[Carey Edmund]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $336,000
Cash invested: $110,000
Sale price: $510,000

I purchased this property as a flip. It was supposed to be a quick 10 week project but was complicated by Covid and a contractor that didn't manage his money well. After firing the contractor I was able to bring the project back on track by managing it myself. The project ended selling at the highest dollar per square the neighborhood had ever seen. I didn't make as much as I originally thought but it was still a win.

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

I work with commercial renovations at my job so it felt like a natural progression. I renovated a rental property I owned prior to selling it so it wasn't my first foray in residential renovations.

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

I found it on the MLS through my agent. There were priced perfectly so I didn't feel the need to negotiate.

How did you finance this deal?

The purchase was traditional financing through my bank with 20% down and the renovation budget was self-funded by me. I now have a private money lender so I won't be investing all my own cash into the next project.

How did you add value to the deal?

Fully renovated the project from top to bottom

- renovated both bathrooms and turned one into a master bathroom
- added LED throughout
- expanded the master bedroom
- added an island and converted the stove from electric to gas
- replaced the roof
- replaced all windows
- added a deck and new fence
- finished the basement and took the house from a 2/2 to a 5/2
- added concreted steps that lead to the front door
- full exterior paint
- added 4 egress windows
- and much more!!

What was the outcome?

It was a success... not perfect but definitely a success

Lessons learned? Challenges?

I fully vetted my contractor by checking reference yet he didn't produce. I believe he would have worked out if not for the struggles Covid-19 brought

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

I manage renovations and all physical plant projects for a company with building throughout the country. I would recommend any future investor do their best to get exposed to construction even if it's cleaning up a job site (for free or minimum wage) for a few hours each week.