1st home also 1st investment / Live in Flip

[Tara S.]

Investment Info:

Single-family residence other investment.

Purchase price: $98,000
Cash invested: $25,000
Sale price: $305,000

Contributors:
Justin Sullivan

We wanted to get our own house but didn’t have the money to buy. My dad told me that he had $20,000 to help pay for my wedding but if I wanted it for a house instead I could. Obviously for us this was the best option over a glorified party. So we were getting our 1st house and got married at the court house. Justin always wanted to do real estate, I was brand new to the idea. He told me to bing watch @FixerUpper so I learned as much as I could from the show. Now it was time to find a house. Justin turned down every house I found over & over again until we came across this old, stinky, filthy house that was caving in & vacant for 17+ years. Justins eyes light up and he said its perfect this is the one. My jaw dropped I couldn’t believe this was the one he chose but I was over living in the apartment so I had faith in him. When we went to offer on the house it was taken off the market ($96,000) and listed on autction.com. So we paid $2500 to be able to bid in the auction, we waited until about 3 mins until the auction was over to start bidding (we now know the site was bidding against us to get us up) We won the bid at $98,000 which we were happy with. Now that we had the house we had to figure out the cash. Justin called around to every hard money lender until we found one, we used my dad as a co-signer (he is a blessing & always very supportive) We get to the house after we closed, Justin and my dad look at each other and laugh as they tell me the bank installed a brand new room in the time they had it listed to when they out it on the auction site. So we paid $2,000 more than expected but got a brand new roof out of it. We did all the work ourself on nights and weekends thinking we were “Saving money” (def were not plus I found out that I was pregnant with Aria) it cost us a lot of time and carrying costs but we consider it as we got paid to go to real estate college. We decided to move in shortly after Aria was born when it was “done enough” and finish as we lived there. We refinanced out of the hard money loan for $125k & got $14k check from that. We ended up closing for $305k.We got a check at closing for $167,000

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

We needed a place to live and my husband knew he didnt want to buy at full value he wanted something to build equity in. I was very new and clueless but I had faith in him.

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

It was on the MLS then removed and listed for auction.

How did you finance this deal?

Cash downpayment and Hard money

How did you add value to the deal?

We completely renovated the entire house and gave it a very trendy modern design. That contributed to it being so desirable.

What was the outcome?

We lived in it for 4 years until we were ready to move once the market became so hot we couldn't stay any longer we knew we would get the most for it if we moved now.

Lessons learned? Challenges?

The biggest lesson learned is doing the work yourself does not save you money. It costs you more in carrying costs and time then it would have been to just hire out.