Investment Info:
Single-family residence fix & flip investment in Fayetteville.
Purchase price: $105,000
Cash invested: $35,000
Sale price: $187,400
Used our private money lender as equity partner on our very first fix/flip property. Private money lender put up the cash and we used our experience to do the rehab. The project took a little longer on rehab than expected. But we were able to get it on the market and accepted an offer of full listing price of $187,400. Profit will be around $22-$25K that will be split between us and our private money lender.
A lot of lessons learned on our first fix/flip. My wife is my partner as she is a Realtor in Fayetteville for the last 12 years and worked in new construction. She managed a lot of rehab projects for a few of her out of town investors and she is very knowledgeable. My experience was knowing how to run the numbers, acquire the property, and finding funds.
Looking forward to the next project!
What made you interested in investing in this type of deal?
My wife and I took the leap of faith not knowing what will happen. Our mind was set that if we don't start now, we will never begin. Our expectations were to learn as we go, seek advice, and always stay positive. It was hard staying positive especially when unexpected repairs came up, but we stayed the course.
How did you find this deal and how did you negotiate it?
It was on the MLS. We reached out to Realtors in the area and let them know of what we were doing. We kept looking on FB groups and found this property. Immediately called within 10 mins of the property posted. It was first listed at $120K. We negotiated down to $110K, my wife wrote the contract, and accepted within hours. My wife and contractor walked the property to do rehab estimate, found more damage than expected. We got it down to $105K.
How did you finance this deal?
We had a private lender. My wife was her Realtor to sell her house and buy another. Then my wife asked her what she was going to do with her money. My wife then told her we are looking for private lenders willing to become our equity partner in all the fix/flips we do. She agreed and offer to $150K first and is willing to go higher after the first deal.
What was the outcome?
We listed the property for $187,400 and accepted an offer for full price. Looking to make a profit of $22-$25K. We will split it with our private lender 50/50. Then do another project again.
Lessons learned? Challenges?
- We will now use staging. We had showings everyday with 4 offers but they were all low offers. We just had photos and virtual tour (Matterport). But my wife decided to add staging and the next day we had a full price offer.
- Don't go cheap on the oven. We upgraded the single oven to a double. Big difference.
- Always budget for unexpected costs.
- Don't ever paint 1970's cabinets to save costs. Just replace them. We spent more money on labor and time.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes. My wife. Sarah. I am biased but she has been a Realtor for the last 12 years in Fayetteville. She has vast experience. She worked for a builder as Director of Sales and Marketing, managed numerous rehab projects for out-of-town investors, and continued to sale/buy real estate. Sarah Solaita works with Fathom Realty.
