My First Successful Flip!
Investment Info:
Single-family residence fix & flip investment in Albuquerque.
Purchase price: $120,000
Cash invested: $21,000
Sale price: $312,000
First flip! Bought it for $120k and bank is financing 70% of ARV which is $295k. $91k was allocated for the rehab and cash to close was $21k. House is 3 weeks away from completion. Stayed on budget but took longer to complete than planned.
Update: house sold after 6 days on market for $312K netting a profit of $43k. Took double the time to rehab and sell than projected but overall happy with the results.
What made you interested in investing in this type of deal?
I wasn't looking to invest in ABQ, but came to visit family and ran into an old high school friend. While catching up, she let me know she inherited her grandpa's home and was looking for an investor to buy. After doing a very preliminary look at the numbers and property, I was able to buy for a little less than what she wanted and coordinated the transaction with local title company. It allowed me to invest in a place I used to call home and help a friend start her life over. A win for us both!
How did you find this deal and how did you negotiate it?
A friend from high school brought up the opportunity and we agreed to $10k off her asking price due to the home needing asbestos remediation and some additional landscaping clean up.
How did you finance this deal?
Limo One Capital. this was my first fix and flip loan and project. they were great to work with and money was provided through draws which added another level of accountability with my contractor. When he fell behind on parts of the project, he had to wait to get paid.
How did you add value to the deal?
Completely updated all major items such as electrical panel, plumbing, HVAC, and windows, and then took a wall down to make main living area open concept. Turned a 4 bedroom into a usable 5th if needed.
Lessons learned? Challenges?
Biggest challenge was being patient in the process. From dealing with repair costs I wasn't anticipating to dealing with contractor who had poor communication skills... lots of lessons learned. Biggest lesson was to not underestimate the cost of doing these types of deals both financially and emotionally; but also to not underestimate myself , the ability to learn something new and the confidence it takes to just do it!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
While I was waiting on the house to be completed, I helped my sister study for her real estate license so she could be the listing agent. It was nice to be able to have family involved in that way and she did a great job on her first sale. All the staff I interacted with at Lima One were great to work with.
