Our First Flip That Will Lead to Many More

[Mahlon A Kester]

Investment Info:

Single-family residence fix & flip investment in Clarion.

Purchase price: $78,000
Cash invested: $18,000
Sale price: $103,000

Single-family residence with 2 bed, 1 bath, 848 sq. ft., modern ranch house in Clarion County, PA.

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

We had no interest in flipping this house when we first bought it, we just knew that we didn't want to rent and the price was right for us. We spent our time and money to update many aspects of the house over the two years that we have been here. Once we put it on market and began looking for a new house, we noticed how much we would like to begin investing in this type of deal.

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

We found this deal through the MLS and negotiated the sellers down from $89,900 to $78,000. At the time, we were not looking to flip it, but we wanted to add value while we were here.

How did you finance this deal?

We used an FHA loan for this deal.

How did you add value to the deal?

We replaced the outdated furnace, added a new A/C, built a custom fence, completely updated the bathroom, and updated the rest of the rooms in the house through paint, trim, light fixtures, etc.

What was the outcome?

We managed to put it on the market "for sale by owner," and got multiple interested people with multiple offers within the first few days. We listed it for $99,900, but two of the prospective buyers got into a bidding war, taking the price up to $103,000.

Lessons learned? Challenges?

We learned that this type of deal is common and could be done often. We spent 2 years doing this as our first house, but we have learned so much during that time, including how much it takes to renovate key areas of a home, what good work looks like, and how to look at the market to see what the home is worth after the renovations.

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

We worked with a great realtor named Sal Mazzocchi from Clarion, PA. However, I'm not sure if he is really into the flipping business. He worked great with us though, so we highly recommend him if you're ever in the area!