Middletown Fix and Flip

[Rebecca Sequeira]

Investment Info:

Single-family residence fix & flip investment in Middletown.

Purchase price: $103,000
Cash invested: $42,000
Sale price: $162,500

First flip project. Removed walls to open up the kitchen to the dining/living area. Removed the DIY screen panels on the patio, which made it much more attractive. Painted all woodwork white (had been stained). Refinished hardwood floors.

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

I've always loved doing home renovation projects, and I also used to be a project engineer in my career. We wanted to start flipping houses.

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

I met another investor while sitting at the courthouse for the Sheriff Sale, and in talking with him learned that he had bought too many houses and needed to sell one. We really paid too much for the house (by probably $10-20k) because we were overly optimistic. This investor also promised he would advise me, and that I could use his subcontractors to do the work, so there was some benefit in that (and that all worked out for the most part).

How did you finance this deal?

Paid cash.

How did you add value to the deal?

My husband and I did a lot of the work ourselves because we wanted to learn, and also to save on costs, but it ended up taking longer to finish it because we were both working full time jobs at the time. We removed the walls between the kitchen and dining/living space, which made it more open and it turned out beautiful!

What was the outcome?

We got it under contract very quickly, but due to the holidays, it took almost 2 months to close. We did not make hardly anything (about $1500 !) but we decided this was our "classroom" and we learned a TON, so we count it as a success for the education we received.

Lessons learned? Challenges?

We learned the hard lesson about paying too much for the house -- you can't recover from that. And we added scope after we got into it, and also discovered a drainage issue, so we had underestimated repairs by about 10-15k. I learned a lot about estimating repairs better.