Investment Info:
Single-family residence other investment.
Purchase price: $245,000
Cash invested: $60,000
This was our 3rd flip/full-time residence. We found this on Auction.com and bought at the courthouse in 2016. It had a water leak after purchase, and so we remodeled 70% of entire home. It's now worth close to $500k, and we've used the equity to do a cash-out refi, and HELOC for other investments.
What made you interested in investing in this type of deal?
We had bought 2 previous homes and remodeled them to varying degrees. We did some work ourselves and found local contractors or handymen for the rest. This had been over about a 7 year period and we loved the idea of purchasing something that needed work, making it nicer, and then using the extra cash from the sale to move up.
How did you find this deal and how did you negotiate it?
We looked for months on MLS and couldn't find a fit - my father in law found this home on Auction.com and helped us figure out how it could work. One person was bidding against us at the auction but we won!
How did you finance this deal?
We used private money to purchase the auction deal for cash, and in the meantime our house was for sale and sold quickly - we paid the private money back with that home sale cash and then got a loan for the remainder of the deal + repair expenses.
What was the outcome?
We waited 3 years and paid down the loan. We owed about $95,000 and house was worth $475,000. We did a cash out refinance to pay off the $95k, and borrowed from our equity for future investments. We also have a HELOC at 1.99% that have used when needed for those rental investments.
