1890's Diamond in the Rough!

[Tracy Taylor]

Investment Info:

Single-family residence fix & flip investment in Loveland.

Purchase price: $120,000
Cash invested: $79,000
Sale price: $285,000

This property on the market for over a year due to severely sagging cracked (OLD) foundation. We totally replaced the supporting cellar beams, repaired the support blocks and mudjacked the perimeter. Did standard repairs and upgrades, exterior was painted, back yard cleaned up. Total project nine months.

The original loan was hard money for 80% LTV @ 10% over 18 months. The rehab funds were also hard money @ 12% over 18 months. We sold the house less than two weeks on MLS.

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

Having gotten a bit of courage after doing my first fix and flip of a fairly typical condo the year before, I had seen this house on the market for a long time and investigated. The price was so low, I jumped in. AND I loved the style! It deserved another chance!

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

Passed it many times and noticed it wasn't moving. Looked it up and threw out a SUPER lowball number (Expecting a no go) and it was accepted.

How did you finance this deal?

I SCRAPED up 20% from various sundry family members lol ($24,000). Then secured primary hard money for 80% LTV @ 14% YIKES on with short term 12-18 months. I could not get a traditional loan for various (credit) reasons but also because of the condition of the house. Appraisal was not good. Had to go for it though. Rehab dollars were the same terms but @ 12%. Was pretty scary thinking about it but I tried not to. You cannot stress the numbers. Just go for it.

What was the outcome?

Made $86,000 on the flip! House sold in less than two weeks on the MLS.

Lessons learned? Challenges?

JUMP IN. Do your common sense diligence but don't overthink. You can (almost) get out out of any deal. As a Realtor, with my own deals, I try to add as many exits / escape clauses as possible...