Live in flip Phoenix, AZ

[Shaun Brown]

Investment Info:

Single-family residence fix & flip investment in Phoenix.

Purchase price: $252,000
Cash invested: $50,000

Long term live in flip in Phoenix, AZ. Home sat on the MLS for 100 days in a time where things were selling in a day or two.

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

I wanted to begin investing in real estate and I thought owning the right home would be able to transition me into the industry. I had heard about all of the rapid equity people were building in the area and thought I was missing out by renting.

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

I found this deal on the MLS. I am an agent so I represented myself in the negations. The house was sitting on the market for a long time so I tried to get a 5% discount on the asking price placing the home in the range of other homes that were in the neighborhood without being renovated. The home was owned by OfferPad which is a company that buys homes from owners and then resells them after painting and installing new appliances.

How did you finance this deal?

30 Year VA. Zero down. Rehab was paid for by several means to include: Savings, Real estate commission, credit cards, and a personal loan.

How did you add value to the deal?

This home had not been updated since it was new so I renovated the kitchen and bathrooms to be more functional. and had new flooring put in throughout the entire home. This was a fix and flip spread out over 2 years.

What was the outcome?

I currently live in the home. Through no effort of my own the neighborhood has appreciated in value roughly 15% over the last two years and interest rates have dropped in half. Given these recent developments I am not sure what my next move should be because the refinance makes this a cash flowing rental however I have a lot of equity that I could take advantage of as well.

Lessons learned? Challenges?

This was a learning experience to say the least. A long term flip is risky without cashflow I would have either rented out spare bedrooms or gotten something with at least one additional unit. Because I was taking on the financial burden the entire time in hopes of seeing a return at the end the outcome was unclear. I would have managed the money better as well taking on credit card debt and personal loans is also risky without cash flow. Finally I would have had a more detailed exit plan.