- Votes |
Single-family residence fix & flip investment in Cartersville.
Purchase price: $240,000
Lipstick flip. 3/1 full brick, adding 2nd bathroom, painting cabinets, interior walls, trim, etc. Securing with SimpliSafe purchased thru BP. Purchased from a local flipper; his team estimated $12k rehab, including bathroom.
Private money $13k (out of $50k available)
HELOC on personal residence $50k
Hard Money Loan $180k
Private money or personal funds
What made you interested in investing in this type of deal?
Want to start buying rentals. However, a friend (who is a local flipper) suggested I instead start by doing a few flips for quick cash to build up a nest egg quickly, which I can then use for the buy & holds.
How did you find this deal and how did you negotiate it?
Have been asking my friend to keep me in mind if he found any "simple, quick, beginner" flips. He is running five flips right now, and most of his are longer term projects, with fairly extensive renovations. He suggested this for the more gentle learning curve, and provided contractor suggestions.
I didn't negotiate it. It's my first project, and I know I'll need lots of help and counsel, so I figured it would be best to just pay and not try to beat them down on the price.
How did you finance this deal?
$5k - Personal funds = Earnest money of $5k
$50k - Personal residence HELOC = Down payment of $50k
$50k - Private money from a friend = Down payment of $12k, balance for holding costs & rehab
Total of $62k for closing day
$180k - Hard Money lender
How did you add value to the deal?
1950's era home. Currently 3/1. Existing bath is full tiled shower only (previous owner was older, single w/ no kids). Adding 2nd bath w/ tub for families w/ kids, pets, etc.
Kitchen is dark finish, solid wood paneling. Painting cabinet doors and frames, adding granite counters. May also paint the wood paneling a lighter color.
What was the outcome?
Closing is tomorrow, so I don't know the outcome yet.
I will return to update this as the project completes. Expected rehab is about 6 weeks.
Lessons learned? Challenges?
Financing the first deal is a PITA, and everyone wants their pound of flesh, plus a few extra ounces. Once I have the first done, know the process, and have a track record, it should be better. Having all funds in one bank would also make financing smoother.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I will recommend a couple when I update this. The agent was very patient helping me get things together, and her lender is AMAZING!