Investment Info:
Townhouse fix & flip investment.
Purchase price: $94,000
Cash invested: $43,000
Sale price: $186,000
Bought this townhome from a wholesaler. The property came with a tenant in place, who was the brother of the seller. I agreed to keep the brother in place for 3 months and I believe it was this flexibility that won me the deal and kept other investors out of the deal. I did negotiate $5k to be held in Escrow in the event that the brother did not leave the property. Luckily, the brother left at the agreed on time and I was able to being the renovation.
Reno consisted of gutting and replacing the kitchen and bathrooms, replacing the floors, light fixtures, HVAC and roof. Did some minor landscaping work at the back and replaced some siding.
Marketed the property for $179,000 and went under contract and closed for $186,000.
What made you interested in investing in this type of deal?
I liked the return profile on fix and flips and felt that the price point and location de-risked my exit.
How did you find this deal and how did you negotiate it?
Wholesaler, who I negotiated with directly.
How did you finance this deal?
Hard money lender
How did you add value to the deal?
Gut reno
What was the outcome?
Sold the property at above my projected ARV.
Lessons learned? Challenges?
The initial renovation budget was ~$30k, when all was said and done I spent $43k on the renovation. The deal still worked at the increased price, but I learned that I need to increase my contingency on deals of this type.
