First Single Family Home Fix and Flip

[Scott Kolsto]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $90,000
Cash invested: $20,000
Sale price: $149,900

After I went into remission, we saved as much money as possible and purchased our first single family home to fix and flip. It was a very dated home where the cats and dogs had definitely marked their territory inside the house. The money numbers are to the best of my knowledge, since this deal took place about 16 years ago.

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

I was looking for an opportunity that would allow us to generate a good profit and move into our first single family home.

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

The deal was located on the MLS. An offer was made and accepted for $100,000. The seller made a follow up request, which I accepted on the condition of a $10,000 reduction in price. The seller accepted.

How did you finance this deal?

This was back in the dat, when you could use a second mortgage to act as your down payment and avoid PMI on the first. Soon after the closing I refinanced the second for a 100% LTV HELOC.

How did you add value to the deal?

The laundry room and family room needed to be gutted due to the animal damage. New drywall carpet 220 electric heat. The remainder of the home needed two coats of Kilz Original on the floors and walls to eliminate the pet odors, paint and carpet. The roof was replaced too.

What was the outcome?

The outcome was a $50,000 check at closing of which $25,000 - $30,000 was profit. Plenty for a down payment on a new family home.

Lessons learned? Challenges?

The biggest lesson I learned, don't do all the work myself. Hire the labor. Get the job done fast, in order to move on to the next opportunity.

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

I was still a licensed Realtor, but chose to work an agent I knew for the purchase and another real estate investor/Realtor for the sale. The method behind this madness was to learn form both agents. I valued their knowledge more that I valued a Realtor Commission.