This deal was purchased with tenants in place and was rented until December 2020 with positive cashflow. Once the tenants lease ended and they moved out, I moved in and renovated the property as a "live in flip". The flip took about 5 months with some work hired out and the rest done by myself as i lived there. I sold this property by owner and was under contract within 24hrs! $60,000 profit before buyer realtor fee and taxes. About $45,000 net

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

I wanted to start investing and building a long term rental portfolio. The initial intent with this property was to buy and rent out until initial lease ended, rehab, and refinance to pull money out. However, while holding this property for a year (positive cashflow by the way) I soon realized the town I live was not the place I wanted to invest long term. I made the decision to move to Chattanooga, TN, bringing the profits there to reinvest and build my new portfolio!

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

Interesting subject. I found this deal from a local real estate friend that knew I was getting into investing in real estate. She knew the owner was about to list the property so we made an off market offer. He countered a couple times then we got it at $105,000. Here is the kicker, he DIED while we were under contract and had no family so property went to the state. A few months later the state contacted us and was willing to sell the property to me for what the owner had agreed to. Crazy!

How did you finance this deal?

Conventional loan. With luck of timing and the market soaring over the next two years I would have been able to refi and pull almost all my capital out, but due to the move to TN I sold.

How did you add value to the deal?

Full remodel. All capex Items except the roof (was redone right before I bought it), flooring, paint, landscaping, toilets, faucets, light fixtures, door hardware, outlets..... you name it we probably updated it.

What was the outcome?

2 yrs later and I made cashflow for a year and a half, and upon the 5 month remodel I sold in the peak of selling season and profited $60,000 on top of cashflow from year one!!

Lessons learned? Challenges?

I really did get beginners luck on this one. If I would have bought this property to flip or BRRRR right away in 2019, my numbers would have actually been off due to my lack of knowledge at the time on running comps and rehab costs. But two years later appreciation had made up for my ignorance. This is pure luck and definitely not always the case. Now for the future I know exactly what I need to do and how to mitigate the chances of losing. Also, be organized and structured with your contractors