Investment Info:
Single-family residence fix & flip investment.
Purchase price: $90,000
Cash invested: $45,000
We bought this house after a wholesaler lost his contract on it, the homeowner in the beginning was a little difficult but we were able to come to an agreement. I gave him a take it or leave it option but I feel like he was bluffing when it came to getting other higher offers on the house and I ended up being right. This flip took a little longer than expected since we were fighting through the holidays and the county was closed for 2-4 weeks causing a month delay.
What made you interested in investing in this type of deal?
The numbers were great! We put a little more into it than we thought we would but at the end of the day we close on the 21st of April and the buyer loves the house. Nothing more satisfying than that!
How did you find this deal and how did you negotiate it?
Found through a wholesaler who lost the contract because he couldn't find a buyer, I think it had to do with the seller more so than the offers.
How did you finance this deal?
We used a Hard Money Lender, Alpha Funding Solutions. They were great and easy to work with and the fact that they helped us solve an issue from a crappy title company who kept blaming everyone else but themselves.
How did you add value to the deal?
Initially this house was a 3/1 with 1400sqft, unfinished attic, and unfinished basement. Here is everything we did.
Basement: Completley finished and added carpet
Attic: Completley finished and added carpet
Main living floor: Created an open kitchen and made it bigger, hardwood throughout the entire main level. Completely updated.
Bathroom: Tiled out and updated.
Added AC to the house.
What was the outcome?
Initially we thought we were going to sell the house for 180-190k but that was based off of the automated comps from our realtor. My wife and I did our own comps and came to an average price of 197,000. We figured we would list about 10,000 higher for negotiation and ended up getting an offer for 202,500. We were very happy and the house appraised for 213,000.
Lessons learned? Challenges?
Yes, we learned which contractors were reliable and who was not. With this we are able to use the same pricing for rehab on the next house. Also, knowing that any house built before 1980 will need to have the knob and tube completely replaced. Do not buy during the holidays!!! lol
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, Charles Hawkins was our realtor and Alpha Funding Solutions was our Hard Money Lender.
