1st Fix and Flip and lot of lessons learnt

[Aj Parikh]

Investment Info:

Condo fix & flip investment.

Purchase price: $160,000
Sale price: $202,000

My wife and I wanted to explore flipping a property but since we didn't have experience or a background in construction, we decided we will buy a cosmetic flip which is something that will only require simple changes to the property like replacing carpet, paint, recess lights, cabinets, bathroom tiles and a vanity.

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

Since I spend 15 hours of the day thinking about Real estate, it was time I got my wife involved in Real Estate :) and she really loves home decor so she took over all the designing of the house and picking out the material for the rehab.

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

Market Pro Home buyers are a wholesale company and they have very few properties that come up on their Virginia list but I was on their email list so as soon as something that met my criteria showed up, we decided to go for it

How did you finance this deal?

We had some savings and the rest we used private money to fund the deal up front and paid high interest till the project was over

How did you add value to the deal?

We renovated the kitchen and bathroom completely and added recess lights throughout the condo with bright lights which really lit up the room

What was the outcome?

There were 2 offers that we got from the 4 showings we got and each person who viewed the property including the real estate agents told us that the condo has really good lighting and the bathroom and kitchen were really presentable.

Lessons learned? Challenges?

There were a lot of lessons learnt during this process.
1. Rehab Costs: We estimated the rehab costs to come out at $25000 including labor and materials but we ended up putting in close to $34,500 for everything.
2. We thought this would be a seller's market so we thought we could get away with asking 5-8k more than the market comps but we were dumbfounded. There were no buyers for 10 days after listing the property.
3. We almost break-evened on the property and at one point we were even look

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

We found this property through wholesaling and we paid way over asking which was another mistake but again, we just wanted to get started and put the deal together.