Investment Info:
Single-family residence fix & flip investment in Decatur.
Purchase price: $200,000
Cash invested: $45,000
Sale price: $348,900
We purchased this house as our first flip here in Decatur, GA. This was a short sale property we were able to purchase using FHA (3.5% down payment). This was not easy, as most of the repairs I did myself. Repairs such as plumbing and tile were hired out. In the end we made a $103,900 PROFIT
What made you interested in investing in this type of deal?
Short Sales were new to me at the time. I heard about it through my father-in-law who is a broker in the area. I knew a deal like this in that area was amazing, and jumped QUICK.
How did you find this deal and how did you negotiate it?
Father-in-law is a broker and told me as soon as it came back on the market. Offered full price, and as someone that was willing to live there, it was a stronger offer to the seller than an investor. We got short sale approval 3 months later (very tough to stick that out but well worth it), and closed using an FHA loan.
How did you finance this deal?
NO MONEY OUT OF POCKET. I used a family loan of 7k for one week, and repaid it with my personal LOC after closing. All repairs were paid using Credit Cards or LOC. My regular income paid for the mortgage payment. Throughout the process of the fix and flip, we were able to refinance and pull most of the money out that we used. So now we are living in the house after fixing, and to pay for the more expensive mortgage, we let a friend move in to help with the extra.
How did you add value to the deal?
Being able to structure a Short Sale is hard. I also did most of the work myself, which is not easy for most. Being able to work on houses and structure the financing is the way to get your FIRST DEALS DONE
What was the outcome?
After all of this was said and done, we ended up selling the house at the end for $348,900, living and owning the house for 3 years allowed us to not have capital gains tax, so all in $103,900 profit for my first flip. Felt AMAZING at the closing table!!
Lessons learned? Challenges?
Don't listen to people when they tell you it CAN'T be done without cash. It CAN be done if you are willing to strategize. We leveraged a lot of credit along the way to make this happen, but in the end it payed out. During this process many people told me I was dumb for putting this all on credit, you might burn yourself, you better be careful, etc.. BUT I DIDN'T LISTEN! This is what happens when you have true power and determination.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, Aria Realty Inc (www.ariarealtyinc.com) helped me source the deal. HIGHLY recommend them for agents in Peachtree City that actually KNOW what they are doing. They are investors themselves and really know where the deals are.
