First Flip was a SUCCESS

[Preston Roper]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $180,000
Cash invested: $180,000
Sale price: $245,000

This was a 3br 2ba that was vacant for a few months. I got a hard money loan at 12% interest only payments for 4 months for the 180K purchase price. I financed the renovation cost my self. It ended with about a 23k profit before taxes.

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

I knew the area and was confident in the comps. I had a friend that lived in the neighborhood so it was an area that i knew fairly well.

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

I found it through a friend that lived near by. Went over to the house one day when he called and said that guys where there moving things out of the house. One of them ended up being the owner. Since i knew the area i made him a cash offer and he took it! We did a little negotiations over the phone and settled on a price that we where both good with.

How did you finance this deal?

The Deal was financed by a hard money lender. The hard money lender financed 100% of the purchase price at 12% with interest only payments. The renovation was self financed and completed in about 3 months and 1 month to sell.

How did you add value to the deal?

We added a front door to update the curb appeal. The inside was in decent shape but the kitchen needed to be updated with new appliances. Painted the cabinets and the whole hose. We added a see through railing to the 2nd floor to make the space feel more open.

What was the outcome?

We had a little trouble selling because the first contract feel through due to the buyer financing. The second offer wanted to have some minor changed including a new hot water heater that we ended up replacing. End of the day we came out with about 23k profit before taxes. I did not to a 1031 simply because i didnt have another house to invest into yet.

Lessons learned? Challenges?

The big thing that i learned was that just because you can do the work that doesn't mean that you should. I did a lot of the work myself and ti was extremely tiring.