Investment Info:
Single-family residence fix & flip investment.
Purchase price: $260,000
Cash invested: $17,000
Sale price: $364,000
We bought our first property as a "Live in Flip". It was really dated and need some love, there was a water stain on the ceiling which scared people away, it need carpet, paint, bathrooms and kitchen were dated but nothing major. This was a great property to start off with, we ended up staying longer then planned due to the global pandemic which actually worked out in our favor because our market was HOT by the time we decided to sell. I've attached before & after pictures of our property below.
What made you interested in investing in this type of deal?
This property was in our budget, the price was negotiable, and it was a fixer. That was exactly what we were looking for.
How did you find this deal and how did you negotiate it?
I found this deal on the MLS it was originally listed for $280,000. Due to the condition of the property and the water stain on the ceiling most people weren't interested but this was exactly what we were looking for. Lucky for us, the stain on the ceiling was only a $400.00 problem to fix from the upstairs bathroom. We also negotiated the price down because the property had been sitting on the market for a few weeks with no action. The sellers were investors that were renting it out.
How did you finance this deal?
We took advantage of the FHA financing on this one since this was our first purchase and we wanted to use the money we had saved to invest in fixing it up.
How did you add value to the deal?
We put in new laminate wood floors, painted, tiled the bathrooms, put in new cabinets and hardware, and opened up a wall separating the dining area from the living room.
What was the outcome?
We lived in the property for three years and cashed out with over $100k without any Capital Gains tax.
Lessons learned? Challenges?
We learned that we could leverage the money on our credit cards that gave us 0% interest for one year and pay back what we owed before the bill came due. Our challenges were mainly dealing with the HOA board during the rehab process. Because the HOA board didn't have any experience with rehabbing properties they made it extremely difficult for us to do work on the property and it took weeks to receive board approvals for any work that was being done inside the property.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, Joseph Sanchez from Apricot realty was my realtor. He helped with both the purchase & sale of this property. And he made the process seamless and easy for us.
