Not all deals go according to plan.

[Jason Gilmore]

Investment Info:

Single-family residence fix & flip investment in Phoenix.

Cash invested: $500

Fix and flip project that did not pan out. We always share the success stories, but it is good to share that it doesn't always work out.

Original plan: Partnering with two agents/investors and a private money lender. I located deal and am the buyers agent representing purchase, investing $500 earnest money and $5,000-$10,000 as gap funding for repairs and will split the listing 50/50 upon completion! Deal was under contract.

Hard stop: Property was a probate case after the death of the sellers father. Estate was indigent and all proceeds from home were to pay any possible debts, controlled by the courts. Mortgage and solar loan in arrears and solar lien on property prevented the sale at the contract price. Solar company demanded an appraisal to be completed to justify price and would not release solar lien at contract price. Appraised price would not make this a favorable deal.

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

Fix and flip deal with experienced partners. I was to bring some cash to the deal, as well as represent the buyer and listing on resale. Potentially a very profitable deal.

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

A friends father passed away, it was his home. We negotiated based on seller needs and work needed on the property.

How did you finance this deal?

Plan was to use private money loan for purchase (which had been secured) and personal cash for rehab

How did you add value to the deal?

Cash and representation.

What was the outcome?

Deal fell through. Property was a probate case after the death of the sellers father. Estate was indigent and all proceeds from home were to pay any possible debts, controlled by the courts. Mortgage and solar loan in arrears and solar lien on property prevented the sale at the contract price. Solar company demanded an appraisal to be completed to justify price and would not release solar lien at contract price. Appraised price/us paying off the solar would not make this a favorable deal.

Lessons learned? Challenges?

Don't get solar!

Our challenge was working with the collections agency, who didn't communicate well, and being stuck between the seller, the sellers lawyer and the collections agency. Without raising purchase price, there was not much we could've done to save this deal.

Not necessarily something we learned from this deal, but always a good reminder, not everything will go smooth, not all deals will work out. Don't let it stop you from pursuing your next investment opportunity!!

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

Me!