Investment Info:
Single-family residence fix & flip investment in Myrtle Beach.
Purchase price: $223,500
Cash invested: $61,825
Sale price: $285,000
We purchased a 3 bedroom 2 bathroom Single Family home and barely broke even after the remodel. We spent too much remodeling it and dropped the price too quickly in a softening real estate market. We should have put a renter in the property to cover the carrying costs of the mortgage but the investor wanted the property sold and a tenant can make that challenging so we continued reducing the price until there wasn['t any profit in the deal.
What made you interested in investing in this type of deal?
It was a decent purchase price and the comparables were great on it. This particular area in our market doesn't have cheaper 3 bedroom 2 bathroom homes so there's a nice sweet spot in the market.
How did you find this deal and how did you negotiate it?
I searched the MLS.
How did you finance this deal?
Yes, my investor financed this deal with a business loan most likely similar to a line of credit.
How did you add value to the deal?
I coordinated the investor, the contractor, and the project manager, providing oversight on the budget. Plus, I SOLD the property.
What was the outcome?
We sold the property and didn't make the return we wanted. Originally, I would have liked to see this property sell for $330,000. However, the market softened and the investor wanted it sold and continued to drop the price.
Lessons learned? Challenges?
A renter can help you save on carrying costs when the market softens.
Don't over build for the community you're in.
Don't be careful when doing a flip in a single family neighborhood that's near a tailor park.
Even though we hired a project manager, I want to be more involved in my deals.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I am a South Carolina Real Estate Broker.
