Investment Info:
Single-family residence fix & flip investment.
Purchase price: $180,000
Cash invested: $7,000
I purchased this property as my primary residence and completed about 50% of the renovations before moving in. I used a 3.5% FHA loan for the purchase and then house hacked while living there. I rented out the 2 bedrooms on the main level to a couple friends and then lived in the basement. This property was in relatively good shape at the time of purchase. It was mostly in need of a cosmetic facelift. I was able to complete roughly 80% of the work myself. I did contract an electrician and a plumber for a couple of projects that were outside of my comfort zone. I lived in the property for 3 years while house hacking and then decided to sell to reinvest into another project. This was a fantastic first property for me. Between the rent collected through house hacking and market appreciation I was able to make a nice profit from this property as well as learn a lot of great lessons. I can't wait to get into my next deal!
How did you find this deal and how did you negotiate it?
MLS deal. I paid full asking price knowing I could house hack and do cosmetic upgrades to force equity.
How did you finance this deal?
3.5% FHA loan. I used my own cash to fund the down payment as well as renovations.
How did you add value to the deal?
Kitchen and Bathroom renovations, adding landscaping.
What was the outcome?
I collected $38,000 in rental income during the 3 years I lived in the property which allowed me to live in the home for very little money out of pocket. I put roughly $7,000 into the renovations and then sold the property for a profit of nearly $60,000.
Lessons learned? Challenges?
As this was my first home purchase, I learned how the process of a real estate transaction works. I learned how to manage tenants, collect rents, and make sure the property was fully functioning at all times. This was a 1950s home which kept me busy as it seemed there was always small problems arising. I learned how to contract work and how to manage getting the best pricing vs. getting the best work done. Many great lessons came from this first property.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Derek Manis (Talk To Tucker) was my agent during the process of selling this property. I would highly recommend him to anyone buying or selling a home as he is extremely knowledgeable and experienced.
