All Forum Posts by: Denise Tinsley

Thanks you are right we did not get a deal now we have to figure out what to do. We will probably hold for a while since we know flipping it won't earn us anything. We may just use it as a lake house since our elderly parents live near by. Possible rent out.

As a newbie I purchased a foreclosed home with cash at $22,000. The previous loan on the home was for $88,000. Comps for similar homes that are in good shape would be around $100,000. I have estimated that the cost to renovate the home is $70,000. The home is located in a lake community 15 minutes from a larger town of 17,000. The area is slowly becoming more popular as the Corp of Engineers is adding many upgraded to the amenities around the lake. The larger town is building new developments 10 miles away and an interstate is being built about 10 miles away. The population in the town where the home is located is 2,400. Demographics in the area is  low income ($35,000) average household income, many retirees, but also people who own vacation homes who live in larger nearby cities. My question is should I demolish the house and divide the large lot it is on into two separate lots just to make my money back or go through with the renovation.  I made many newbie mistakes, the first underestimating the repair the home would need. I made the dumb mistake of not seeing the interior before purchasing since it was an occupied foreclosure home. 

Investment Info:

Single-family residence fix & flip investment in Wappapello.

Purchase price: $20,000
Cash invested: $45,000
Sale price: $94,000

The home was built in 1960 as a lake house and is in need of a complete remodel. All major systems will be replaced or upgraded (HVAC, Roof, Electric, Plumbing, Insulation) as well as interior remodel.

What made you interested in investing in this type of deal?

My partner and I wanted to learn to flip a home so we wanted to start small.

How did you find this deal and how did you negotiate it?

We found the home on auction.com. We did not negotiate, we went through a bidding process.

How did you finance this deal?

Personal savings (cash) for the purchase and HELOC for the remodeling expenses

How did you add value to the deal?

We have experience in improving modest homes, usually our principal residences. We both understand the specifics of the area the home is located.

What was the outcome?

The remodel is still in progress.

Lessons learned? Challenges?

Assume all expensive systems will need replaced when purchasing an older foreclosed home.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No