Investment Info:
Single-family residence fix & flip investment.
Purchase price: $200,000
Cash invested: $48,000
Sale price: $364,990
Active adult community (55+) single-family home bought during COVID. Private money loan @12%, no monthly interest payments. Lender financed purchase and renovation costs. Subcontracted renovations to save on cost. Started demo/renovations in July. Completed renovations in Late mid-October. Removed a wall that divided the kitchen from living & dining rooms. Replaced all cabinets. Retextured all drywall. Removed popcorn ceilings. New craftsman-style doors and hardware. Gutted both bathrooms and installed walk-in showers. New paint interior and exterior. Hot water heater started leaking-replaced. All new kitchen & bath fixtures. New vinyl plank wood-look floors and new baseboards. New attic insulation. Updated lighting with 30 new LED recessed lights.
What made you interested in investing in this type of deal?
The seller was motivated. She did not have the means to remove all of her personal belongings and was looking for someone to take the property off her hands. It was a light hoarder house with some cat issues.
How did you find this deal and how did you negotiate it?
A colleague and fellow real estate agent knew we specialize in homes where the owner wants to just take some personal belongings and get out quick. The agent did represent the seller. We both walked the property and I made a very low offer to start. $190,000. Knowing I would be able to go up to $225,000. The seller countered my offer with a flat $200,000 and we were under contract.
How did you finance this deal?
Private money lender. They have financed all of my deals and do not require monthly interest payments. In this case, that was an essential part of being able to hold the property until January when the buyers return to the area. It does cost a little more, but worth it without having to pay interest payments for 8 months.
How did you add value to the deal?
Opening up the floor plan and giving the layout a more desirable layout. Selecting mid-grade cabinets and high-end appliances giving the space a luxury feel at a minimal cost. Added custom waterfall counters to extend out that luxury feel.
Lessons learned? Challenges?
So many lessons learned on this project! I hired my son & 4 of his teenage friends to do the demo. They had nothing else to do and enjoyed the work and getting out of their homes during the lockdown.
Hire good contractors and have them sign a contract. Go over expectations and get everything in writing. Hold contractors accountable for the work they do.
I think next time I am going to install cameras! LOL
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Since I have a Real Estate license and a great growing team. This is one way to grow my business. It also saves a little on sales commission. However, since I am licensed, Arizona holds me to higher expectations than just a home flipper. If you are looking for an experienced agent to represent you, give me a call!
