Most recent sale on a lease option house

[Carl Mullin]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $85,000
Cash invested: $50,000
Sale price: $173,000

Bought this one subject to. Did light rehab on the interior and did a lease/option. Couldn't exercise his option. Put another $24,000 and sold.

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

Potential profit and reducing the capital gains taxes for holding more than a year.

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

Direct mail.

How did you finance this deal?

Some cash out of pocket and took over the mortgage payments

How did you add value to the deal?

Rehabbed the interior prior to renting and then did the exterior prior to sale

What was the outcome?

Very nice profit.

Lessons learned? Challenges?

House was built on fill and had some settling issues. We had a company come in to assess the foundation. While it was within specs it had some ceramic tile cracking so we paid to have the foundation pinned to stop the settling. Wanted to insure our L/O tenant they were buying a good house. NO GOOD DEED GOES UNPUNISHED. Seller could not get insurance until we paid a geotech company to bore the ground on both sides of the house to prove there was no sinkhole. $3,000 hit to the bottom line.