The investment that gave twice! A cash-out refinance and then a huge win with a large sale in the end. An awkward layout and motivated seller was to our advantage. We searched for 9 months to find the right property. This diamond in the rough was exactly what we were looking for. We have incredible vision to see things others cannot. As well as being super innovative and cost savvy, we can make things look like champagne on a beer budget.

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

We did well with our first live-in fix and flip. It was a sure path for us to create a lovely home to live in as well as make a profit in the end.

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

This deal was on the MLS. It was stale, sitting for months. Super awkward layout. It was 2200 sq ft, 3 bedroom, 2 bathroom home.
The second floor was 1100 square feet entirely of knotty pine and an open bathroom you would find in a 70s disco club (although house was built in 1990). The sellers were going through a bitter divorce and there were no other offers in sight. It had been listed at $220,000. We held firm with our $160,000 offer.

How did you finance this deal?

We used private money for the purchase with interest only payments. The renovations were funded with our profit from our first live-in flip.

How did you add value to the deal?

We added value by creating an open floor plan. Changed the entire layout. Made a master suite and added a powder room. Moved the laundry and doubled the size of the kitchen. The kitchen was created with a used set of cabinets and a few found at Habitat for Humanity that we painted. Custom built the island and used a lovely stone. Added a fireplace with built in shelving and cabinet surrounds. Reworked the entire second floor to be 3 large bedrooms and a giant bathroom.

What was the outcome?

A win twice investment! Our first win was doing an 80/20 cashout refinance February 2019 for an appraised value of $290,000. We had a check for $232,000! Paid our private lender $160,000, and bought a buy and hold rental with an inherited tenant. That would be our first buy and hold investment.
The second win was taking advantage of the low interest rate/Covid market! Sold the home September 2020 for $375,000! We walked away with $114,000 cash in our hand!

Lessons learned? Challenges?

This deal taught us a ton about loan products. Learned about the power of cash out refinances! The biggest challenge was finding the time to work on the home while both living there and having 'real' jobs.