Example of a six figure flip
I closed on this house 3 weeks ago and decided to share the process start to end. It was an off market property but there were agents involved. I looked at it with mine and even for a contractor/flipper it seemed a little intimidating. The place was originally built in 1961, had what looked like 4 additions, and multiple remodels. It is 2650sqft plus garage. The neighborhood is more expensive than I have ever dealt with in combination with an ultra strict and pricey HOA (tennis anyone?). Oh yea, it was also covered in mold.
The house was hitting the MLS on friday for 300k. It was thursday afternoon, I was the first to see it. We walked through the house like we always do - brainstorming the new floorplan as we go. We both bring up potential issues, value adds, what to keep, what to leave, levels of finishes for the neighborhood, etc. I ran some rough numbers in my head and in combination with an ARV from my agent I had him write up an offer.
250K cash. 10 day inspection period. No other contingencies.
The next day the offer was countered as expected. 270k and they would throw in the patio furniture. We have a deal!
Next step - find some money. Figuring out how to make offers before I had any money lined up was a game changer for me. I know it might sound crazy but finding $320K I think is easier than finding $320. I called up a few of my investors and mentioned to them that I had a project I wanted to show them. One of them was more interested and so I gave him the tour and a proposal for terms. I like to make it easy on these guys. They are done doing any sort of work. He said he thought the house sucked but the lot was a home run. Exactly what I thought. We agreed he would lend me 320K and I would put in the remaining 80k. I have about 70k liquid to my name.
Basic plan.
Purchase 270k
Remodel/Loan/Holding 130k
Sale Price 550K
Closing Cost 35K
Profit 115K
Ok enough talk here are some pics
My favorite tool is the hammer. Stay tuned for demolition.