Single-family residence fix & flip investment.
Purchase price: $125,000
Cash invested: $180,000
Sale price: $220,000
My wife and I acquired this property from an off-market wholesaler in December. Since we were new to the area (the state for that matter) it took a couple weeks to find a contractor, but once we signed with a contractor that was willing to work with us (we did a good bit of work ourselves) it took seven weeks from demo to contract. This was a fun project and we learned a ton from it! We sold it through a killer agent who got us multiple offers and even a bidding war. Biggest take-away here is that who you have on your team makes a huge impact on your success.
What made you interested in investing in this type of deal?
We were interested in this kind of deal because we need to build capital for other investments (mainly buy and holds and lending).
How did you find this deal and how did you negotiate it?
We found this property from a wholesaler that had a fixed price.
How did you finance this deal?
We financed this deal with cash.
How did you add value to the deal?
We added value to this deal by pitching in our own sweat-equity and bringing a humble attitude to how we lead our team members (contractors, agents,... etc). We also enter into these types of deals with an attitude of integrity and excellence. More specifically, if we wouldn't live there by the time it's done then we did something wrong.
What was the outcome?
The outcome was a positive cash gain, longterm connections/friendships, and inspiration to move the next deal.
Lessons learned? Challenges?
Like most newer investors we ran into several challenges. The first and potentially most devastating was a miss-judgement of rehab budget. I had even ordered The Book on Estimating Rehab Costs @J Scott prior to this project but had not read it yet (SMH). Our vision just costed more to make a reality in a new area. Thankfully, our ARV was Very conservative and actually jumped about the same as our rehab numbers.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes! If you are in the Ellis County area (Waxahatchie, TX) I highly recommend the Quintana Team at Keller Williams. Dawana and her team acted as our selling agent and did a fantastic job marketing and negotiating our sell in a timely manner.
Congrats on the successful flip! Looks like you learned a lot and made a good profit!
How much were the repairs on the property and how much did you miss your initial estimate by?
@Logan Gill Congrats, man! You came out ahead there in multiple ways that will last. Rehab costs, until you've done this dozens of times, will probably exceed your initial guesses 9/10 times because you can't always see everything that needs attention before getting your hands dirty, lol. Great to read about success stories like these, love it!
@David Robertson we definitely learned a lot! We put about $50,000 into rehab to ensure that we would hit the top of that particular market. I missed it by over $15,000! The biggest factor was that this was our first flip outside of our normal Middle TN market and also our first one hiring in outside contractors. Luckily for us I planned on the lowest possible ARV which was also more than $15,000 under what we actually sold for. Thanks for the reply!
@Bryan Blankenship Thank you! Hopefully I can post another one soon!
Congratulations @Logan Gill ! I am happy that it ended up working out really well for yall. I live in Waxahachie and plan to start flipping in a couple of months. I have one long term rental in Red Oak and want to try to get more in Waxahachie.
Thanks for the Quintana Team/Keller Williams info. I will have to check them out.
If you don't mind me asking, who did you use as your contractor? I have one but I'm always looking for other trustworthy/reliable contracts.
Hey thanks @Matt Pena ! I heard good things about Red Oak while we were down there. I'm definitely still keeping my eye on Ellis County too. Lots of good opportunities. I will send you an IM with my contractor's info. He's a great guy and even worked through the night on multiple occasions to make sure we would hit deadlines. Let me know if you run into any deals in that area if you need any other contacts or would like to partner.
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