The Flood Zone Stunner

[Joe Worth]

Investment Info:

Single-family residence fix & flip investment in Louisville.

Purchase price: $22,500
Rehab: $85,000
Sale price: $182,000

This property was severely damaged from years of termite damage and vacancy. This was almost a new build as we installed new everything including plumbing lines in the slab. We converted to a 4 bed, 2 bath with a master suite. Being in a flood zone and the extensive amount of rehab needed, the city shut the project down multiple times and we had to go through local and state water companies and agencies to get approvals to do the work. Glad to get rid of this stunner (flippers know the feeling)!

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

We saw a huge spread could be made. Little did we know all the work we had ahead for us as we ran into all the termite damage after tearing off the drywall.

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

Listed on MLS for $32,000 and low ball offered at $15,000. Agreed on $22,500.

How did you finance this deal?

Hard Money.

How did you add value to the deal?

We completely rebuilt the entire property and added a master bath and a bedroom.

What was the outcome?

Under contract for $182,000! We are setting a new high end comp in the neighborhood as the previous highest sale is $159,000.

Lessons learned? Challenges?

Flood zones are very risky to flip in. We ran into many challenges with the city and local/state water departments. This property also took a little bit longer to sell as most buyers are scared of buying their forever homes in a flood zone.

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

When all other hard money lenders said no to financing this deal, SurePoint Equity gave us the green light to do this project. We purchased this property with a young and hungry realtor named Alexis Fentress who is also an investor.