Investment Info:
Single-family residence fix & flip investment.
Purchase price: $108,000
Cash invested: $35,000
Sale price: $189,900
Single family home was a 2 bed 1 bath unfinished basement. Previous owners wanted out due to water issues in their basement. Regraded the backyard to handle rainfall, installed new gutters, and had a new driveway poured to better flow water away from basement. Added a third bedroom and an office in the basement along with ample storage and a living room. Also added a full bath to the basement.
What made you interested in investing in this type of deal?
Was approached by the homeowners to help them get out of a home they couldn't afford to repair.
How did you find this deal and how did you negotiate it?
Homeowners approached me as a licensed contractor to see if I could help them repair water damage. Ended up purchasing home in "as-is" condition and flipped myself.
How did you finance this deal?
Non-mortgage business loan. Terms were 12 months interest only payments with a balloon of the full principal at the end of 12 months. Flip did not take that long.
How did you add value to the deal?
Other properties in the area were selling for approximately $50,000-60,000 more than they were asking for this property. They knew they had some significant repairs to make to stop water from flooding the basement.
What was the outcome?
Purchased home in May 2021. Added a bathroom, bedroom, living room and office in the basement. Regraded backyard soil. Remodeled existing bathroom and kitchen. Refinished hardwood floors. Sold for $189,000 after purchasing for $108,000 and adding $35,000 of capital into the project in remodeling costs.
Lessons learned? Challenges?
Some electrical codes had changed at approximately this time, so there were some cost overruns on the electrical portion of the bids. But other than that, this flip was smooth.
