Single-family residence fix & flip investment in Luzerne.
Purchase price: $36,000
Cash invested: $100,000
Sale price: $152,500
This was my greatest learning experience. I now walk through homes with a different sense of purpose and understanding of what is going on as well as problems that may be present. I will be sure to use all of this knowledge in all of my future projects.
What made you interested in investing in this type of deal?
As a Realtor, I see many houses come on the market each day. I always wanted to work on a project of my own but my first group of potential partners seemed to drag their feet. We were too late to purchase the home and it had come off the market. Years later I was starting up a LLC with a new business partner who was as head strong as I was. We looked around to find the perfect starter project with no luck. One day 437 Charles came back on the market and we jumped on it.
How did you find this deal and how did you negotiate it?
I found it as a foreclosure newly re-listed on the market. I used my experience in Real Estate to get us a good deal and the rest was completing all the paperwork to make everything go through smoothly.
How did you finance this deal?
We used a 203k loan to finance the purchase and renovations done to the house.
How did you add value to the deal?
We did a lot of work to the house. More so then hindsight would have liked me to do. The house was old and all the walls were plaster, hiding old electric and plumbing. We gutted the house. Upstairs we moved walls around to better use the space and give each bedroom its own closet (Master getting 2). We re-wired and re-plumbed the whole house inside and out. Installed new furnace, water heater, and A/C. Insulated and sheet rocked the walls. Updated the Kitchen and bathrooms. First floor laundry.
What was the outcome?
We gained a lot of knowledge and came out a bit ahead.
Lessons learned? Challenges?
There is a process to flipping homes that needs to be carefully calculated before any work can be started. Even with the right procedure problems will always arise! Do your homework before you get yourself involved in a project and always ask a professional if you have any questions.
Can you elaborate alittle more on hope a 203k rehab loan works specifically? Is it a separate loan apart from the loan to purchase the home?
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