How I did a Fix and Flip with No Money of My Own!

Last summer (2017) I decided to pursue my dream of fixing and flipping a property.  But first there were a few major obstacles that had to be overcome. 1) I am a Single Mom of 3 with little to no Cash to invest of my own.  2) I am NOT employed by a company where I earn a W2 paycheck and have no way of obtaining a traditional loan.  3) I live in Southern California where finding viable rehabs are difficult to obtain at a price where the numbers make sense.  Even being a Realtor myself, this was a challenge.

Here's how I did it in 8 Months and Netted a 57k profit. 

1) I have a good friend who had money to invest and decided to take a chance with me.  This is key, as I would not have been able to put down the 20% necessary to obtain a hard money loan.  We made a deal to attach a lien to the property and have a 12 month note at 10% Interest to pay him back.

2) I absorbed anything I could read, listed to and get feedback from on the Bigger Pockets Website.  I also attended some meetings at a local real estate investors club and made connections with other investors, asked lots of questions and gained some great ideas on how to go about finding and funding a property.  

3) I made connections with another investor who connected me with a Hard Money Lender that they had used in the past with great success.

4) I initially tried to find viable properties in Southern California, but the numbers didn't make sense.  Through my second investor connection, I got in touch with a Wholesaler in the Phoenix area.  These properties were attainable at a much lower starting price point, and the ROI potential was much higher.

6) After visiting the Phoenix area at the end of October 2017, I got in touch with a Realtor and I ended up landing a Mid-Century Home in Scottsdale, AZ.  I  purchased it from another investor who decided they had plenty on their plate and would sell the property to me.  This was a great deal for him, as he paid very little for the home at probate sale and only had it cleaned, gutted and painted on the outside for a net $60k profit. (I hope I can do a flip like that in the future!)

7) I purchased the property for $245k, with an additional $64k rehab loan at 13% interest.  I had 12 months to pay back the loan, paying monthly interest along the way.  The loan was funded in 7 days.

8) I interviewed 3 Contracting companies to complete the project and work began about 1 month later. Note to investors:  I would NOT recommend purchasing a property around November to December, as work was delayed due to the Holidays.  As we well know, every day counts when doing a rehab due to holding costs, and the clock was ticking.

9) Setbacks:  Unfortunately about 2 months into my project, the Contractor I hired closed up shop right in the middle of the rehab. I then had to find a new company to take over my project, which put us another month behind.  Luckily I got in touch with an awesome Realtor in the area that had done many flips with great success and had resources for finishing the project.  

10) I made numerous trips back and forth to AZ, and a had a tremendous amount of help from my Fiance, who is a Contractor himself.  I also ended up needing to borrow and additional 15k from my Partner to finish the Rehab. 

11) The house went on the market and we had an offer within 3 days.  Unfortunately, the 1st buyer fell through, but within a week we had another offer with a 30 day Escrow.

12) After Finance, Holding, Rehab, Travel and Real Estate Costs, I ended up Netting 57k at Closing for about a 16% ROI.