Single Family Flip lessons learned.

[Glenn English]

Investment Info:

Single-family residence fix & flip investment in Stoneham.

Purchase price: $315,000
Cash invested: $180,000
Sale price: $519,000

Purchased a SFH off an auction website and funded the rehab through an investment brokerage and private money and ultimately cashed out my 401K to finish the project. :(

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

I was looking to do fix and flips, and then purchase multi-families to brrrr for cash flow

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

I had been looking at this property that was on HUBZU. I wasn't able to negotiate since it was an auction website however I watched this property come off and on for about 6 months.

How did you finance this deal?

Velocity Mortgage Capital as well as a private loan and then used my 401K funds.

How did you add value to the deal?

I acted as the GC and found my own subs and managed the whole process. In the end, I would have been better off hiring a GC to deal with all of the headaches, however I learned a ton by doing it on my own.

What was the outcome?

I broke even on the flip, but because I had to take out a loan against my 401K, I wasn't able to pay it back in time and ended up losing all of my 401K savings and paying taxes and penalties. This was my biggest regret. Only use your 401K for very short term use if absolutely necessary and I would avoid borrowing against it if at all possible.

Lessons learned? Challenges?

Trying to do too much myself...and not having my funding in order. Went over budget. Many lessons learned.

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

I am a licensed agent so I purchased and sold the property myself and was able to save on buy and sell side commissions.