Updated almost 5 years ago on . Most recent reply
Off Market Flip to Hold
Investment Info:
Single-family residence buy & hold investment in Oklahoma City.
Purchase price: $135,000
Cash invested: $30,000
Bought off-market before I had much experience. Spent a lot of time in biz casual work clothes on my lunch breaks sitting in a smokey house getting to know the seller. Got it for an extremely good price. Appraised $25,000 over PP without touching it, invested $160,000 into the house and garage apt. Total gross rents = $2800, net cashflow of $830/mo, appraised over a year ago for $359,000. Was supposed to be a flip, but at the very end I bought partners out to hold it.
How did you find this deal and how did you negotiate it?
Off market, in-person time with owner learning her problems and offering solutions.
How did you finance this deal?
Bank loan with construction holdback
How did you add value to the deal?
layout changes, huge cosmetic upgrades, added appliance amenities, closed in a 200 Sq Ft porch and did it the right way, new HVAC, removed knob and tube and rewired, 100% new water lines, drain lines, gas lines, new roof, structural repairs, landscaping.
What was the outcome?
If I had known what I was doing then it could have been a home run BRRRR, but the cashflow and equity are a lucky backup plan!
Lessons learned? Challenges?
GC management - had to fire GC at end of this project, and although it cost us a lot of money to do so (included in the $160K), we could have done better firing the GC earlier in the project. Never something I enjoy doing, but as performance got worse our response was to micromanage when we really should have just called it what it was earlier on. The quality of work was great, the problem was HUGE delays and lack of effort.