Fix-and-Flip - the long way.

[Ryan D.]

Investment Info:

Single-family residence fix & flip investment in Veradale.

Purchase price: $123,500
Cash invested: $78,000
Sale price: $263,500

We ended up having to jack the house off the foundation to fix the 'repairs' done by a previous owner. Including all new master beams and subfloor. It took us longer than expected due to the basement reframing requirements.

Renovations to the rest of the house included updated kitchen, bath, flooring, paint and some landscaping. We also opened up the garage door to make room for a 2nd car.

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

We wanted to try our hand at a really big project and this was a great opportunity to prove to ourselves that we could tackle almost anything!

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

Local wholesaler brought us the deal. Negotiated with them on the final purchase price based on it's condition.

How did you finance this deal?

Local hard money lender, they were super helpful and walked the property with us to give us their take on how best to rehab it.

How did you add value to the deal?

All new.... almost everything.

What was the outcome?

Sold on the MLS for more than we thought.

Lessons learned? Challenges?

Never buy a house without walking it first, we made an offer then we walked the property and found some serious issues. Thankfully we were able to work with the wholesaler and the homeowner to come to a win-win-win solution for everyone.

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

TC Lending in Spokane WA. Great people and super helpful along the way!

[Vaughn K.]

Originally posted by @Bonnie Low:

Foundation issues are scary! Were you expecting the foundation problems or did that come as a surprise? Just wondering if you budgeted for that initially or not?

 Foundation issues don't have to be scary! It really depends on the type of foundation and nature of the problem. I just bought a 100 year old house that had settled over the years and had a decent incline in the front half of the house. Because it has a basement with easy access it'll be a piece of cake to jack it and shim it if I decide to. 

I think foundation issues might be one of the best things to find in a value but, just because it scares people so much more than it should. I mean have a pro look at it if you don't know what's what, but a lot of the time you can jack a house to relevel it for just a few grand. 10-15 is usually MAX for a really severe problem.

Normal investors look for the stuff that scares consumers away, like an ugly kitchen... I'm beginning to think smart investors should look for problems that scare normal investors away for their value add properties.