Investment Info:
Single-family residence fix & flip investment.
Purchase price: $95,000
Cash invested: $115,000
Sale price: $224,500
Renovated this 1960's single family home. Did few modifications to the layout making it more functional and open. Biggest challenge was staying within the budget with two big expensive fixes that needed to be done. #1 was the cracked long driveway and #2 a poorly repaired retention wall. I was able to fix the driveway and then negotiated with buyer to only reinforce the wall (and gave them a $1,500.00 credit at closing).
Lessons learned:
* The most obvious one... know your numbers. A few things came up that weren't expected. If the wall would of needed to be done... I would of lost money.
* Location! Invest in desirable areas. This will guarantee that you exit successfully regardless of the situation. I had multiple offers within 24 hours of listing. Even after a couple of failed contracts... we still got multiple offers at full price.
* Don't blindly trust your contractor. You (or a partner) have to be present and inspect their work.
* Hard Money Is good... if you use it properly. Factor in their cost and it will all work out.
What made you interested in investing in this type of deal?
I knew the location was very desirable! It would sell fast regardless of the challenges this property had.
How did you find this deal and how did you negotiate it?
Through a wholesaling company.
How did you finance this deal?
I used a local hard-money lender. They gave me $80K of purchase price and $50K of the rehab. Closed in 2 weeks.
How did you add value to the deal?
We opened up the floor plan in the kitchen/living area. Created the open space that everyone is looking for nowadays. In the master bedroom we united two rooms to be able to create a walk-in closet and a big master bath.
What was the outcome?
Had multiple offers within the first 24 hours. Had some minor repairs to do after the buyer's inspection came back but sold at full price!
Lessons learned? Challenges?
Always pull permits! They are there to protect the investor from the contractor. Also, getting an inspection before (or during) punch-out is a good idea. That way the contractor has a detailed list of things that must be addressed before final payment.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Melissa Whitehouse and Roger Webb from Webb Real Estate Team are AMAZING! They totally came through big time with the contracts that we went through. Will use them ALWAYS and recommend them strongly! http://www.webbrealestatega.com/home.asp
