First buy and hold rental turned into flip.

[Joe Archbold]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $372,000
Cash invested: $85,000
Sale price: $615,000

Initial plan was to buy and hold. Due to market conditions we pivoted and took to full renovation remodeled basement, remodeled kitchen to all new appliances and cabinets. Removed interior walls on main floor to improve floor plan. replaced windows and siding. Planned to move in as primary residence if market continued to soften but we sold.

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

This was an off golf course property that had too much disparity between home prices on the course versus off course.

How did you finance this deal?

No real insight here. We used traditional lending to get started. some of our own savings and by the end a handful of credit cards.

How did you add value to the deal?

This is tricky as we were going to turn it into a rental. there were too many issues that needed to be addressed and in short order the kitchen was removed. That is when we changed the strategy.

What was the outcome?

The home was a beautiful place. We started to get emotionally attached. As the market started to soften we had both our primary home and this home for sale at the same time. really started to get an understanding of getting trades in and out without too much delay. Construction was strong at the time and many good trades available.

Lessons learned? Challenges?

I took on too much myself. From setting cabinets to replacing windows. I am sure I was much slower than a outsourced company. But I was also a little cheaper.
My game plan was to make this a rental. When we decided to remodel we were already in it and with the clock ticking we just got after it without having the luxury of time to plan.

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

I have used a realtor friend of mine that has become an amazing resource. We have looked and walked through almost 100 houses, or multi family units by now. He is a great sounding board and more than 15 yrs later brings so much value to my business.