Investment Info:
Single-family residence fix & flip investment.
Purchase price: $276,000
Cash invested: $45,000
Sale price: $349,000
This was my first Fix & Fip experiance. I went in with 4 investors for a 50% ownership with a contractor that owned the other 50%. So I was in personally $11,250 for just under 90 days. I made my money back plus $1125 or 10% profit. We had a last minute new roof and structural issue that added $15,000 in cost .
What made you interested in investing in this type of deal?
I own a mortgage company and real estate company that keep me very busy so I was looking for a third income source and came accross an investment Fix and Flip that all I needed was to invest. I did not swing any hammers, I only applied my money. I do not want to swing hammers or do anything to take away from my daily business.
How did you find this deal and how did you negotiate it?
I was pulle din as a fourth investor for a quik $11,250 in needed flip money.
How did you finance this deal?
I did not handle that side, we partnered with a contractor who got the hardmoney loan , the ivestors supplied the needed down and rehab money.
How did you add value to the deal?
On this deal I honestly just got involved last minute to see how this paticular contractor system worked.
What was the outcome?
Outside of a last minute expensive repair, I walked away wth a 10% return in just less than 90 days.
Lessons learned? Challenges?
Be prepared for the unknown, unseen. We knew going in we might need a new roof. What we did not know was the extent of the damage under the roof. Costs in California are expensive to begin with. When ding a flip be prepared that FHA cannot be used until 90 days have passed so you are really looking for a coventional loan purchase. That does eliminate some of the potential buyers when trying to close and be out in 90 days or less.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No, I am a licensed Real Estate Broker and the other investors are licensed agents and a licensed contractor and we all worked together to try and pull a quick deal together. We have two other deals we are working on so we will see if we can apply what we learned and see a better return.