Investment Info:
Single-family residence fix & flip investment.
Purchase price: $66,000
Cash invested: $30,000
Sale price: $169,000
I grew up next door to this property. It was originally homesteaded in 1890. I renovated every single inch of this property. I took down every interior wall and completely changed the Floorplan. It was originally a 3 br 1 ba at only 950 sq ft. It is now a 2br 2ba, has a Master Suite, open Floorplan and is gorgeous throughout. I had to grade and level the entire property and plant new grass and it's now one of the prettiest lawns on the entire black. A detached garage was built off site and delivered and is the only work I didn't do, although I did wire the building and install the garage door. This was a labor of love and there were so many unique and challenging aspects to the flip. It's where I cut my teeth and tested all my knowledge and skills set. From the floor joist being cut from the sill plates and the entire house needing brought to level, the foundation requiring correction, to the no slope rubber roof leaking and needing replaced when I say I renovated every square inch of this property I mean that literally. And I did 100% of the work myself. My family home was next door so I did all this work while working full time and maintaining a household and family.
How did you find this deal and how did you negotiate it?
I lived next door, growing up it belonged to the original homesteader, a little old lady named Thelma. I used to mow her lawn and shovel her side walks. After she passed it became a rental to a slum land lord and after one of his tenants destroyed the property while having 8 people living inside it's 950 sq ft, he and I had a conversation and I bought it from him as-is for 69,000 and he didn't have deal with the mess they left. I only saw $$$ 😁
How did you finance this deal?
I obtained a commercial loan that was a 1 yr interest only and required 25% down which I borrowed from my step father to be repaid after closing plus a $5000 payment. The commercial loan allowed me to draw up to 85% of the ARV as needed and allowed me to fund the Renovation. I had to extend the loan once and completed the entire thing in just under 2 years while working full time.
How did you add value to the deal?
Changed the Floorplan from 3br1ba to a 2br2ba w/ Master on suite. Added a detached garage. And I put all quality materials and high end finishes throughout. Crown Molding. Custom Cabinetry. Etc etc
What was the outcome?
A result not typical to a first time flippers first deal.
Lessons learned? Challenges?
Yes.
All of them.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Scott Pfieffer
