Investment Info:
Single-family residence fix & flip investment in Winston Salem.
Purchase price: $87,500
Cash invested: $20,000
Sale price: $125,000
Previously a rental property. Replaced all flooring, painted top to bottom, new fixtures, new stainless steel appliances, replaced counter tops, added back splash, repaired sheet rock on ceiling in laundry room, new front door and garage entry door to kitchen, new garage door. Contracted out most work and put in a little of my own sweat equity in the kitchen and landscaping.
What made you interested in investing in this type of deal?
It didn't have the best margin but I was tired of being stuck in analysis paralysis and just decided to take a CALCULATED chance.
How did you find this deal and how did you negotiate it?
A friend owned the house and had tenants who skipped out on the lease and left the house needing a lot of TLC. My friend just wanted out from under the burden of this house. It was in pre-foreclosure. I negotiated with the bank, help my friend get on a payment plan to get the house out of pre-foreclosure and bought myself time to complete the rehab. We signed an agreement with the purchase price. I made the payments until the house was repaired. I then had a double closing on the property.
How did you finance this deal?
Self-funded the holding costs and some of the rehab, family loan for the remaining rehab costs. Bridge loan for the double closing.
How did you add value to the deal?
My marketing expertise, general construction background, negotiation skills, and the overall vision for the project.
What was the outcome?
The outcome was positive. I did make money on the deal but the real value was learning what to do, how to do it and what NOT to do the next time. You will always learn a lot from your first deal!
Lessons learned? Challenges?
Initially had a partner for the rehab. Realized we did not have the same vision for the property and I ended up buying them out. Know who you are partnering with and don't just take their word that they have the experience they say. Ask for references, even if they are your friends.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes... I worked with a GREAT Realtor named Scott Simpson with Keller Williams. Wait, that's me!
All kidding aside, David Cruise at Straightline Funding set me up with the bridge loan and was tremendously helpful. I would certainly work with him again, hopefully sooner than later!
