My First Flip: House-Hacking in Madison, WI
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $124,500
Cash invested: $20,000
Sale price: $182,500
I purchased my first investment when I was 22. I lived in the property (condo) while renovating over 3 yrs, in addition to renting out the 2nd bedroom which paid my mortgage every month. With this house, I did all cosmetic updates- flooring, paint, kitchen counters, hardware & appliances, new bathroom flooring, vanity/counter & fixtures. I had 3% down (~$3,700), ~$20k in expenses, and I grossed ~$60k when it was sold.
I used this money to provide a down payment on my next flip.
What made you interested in investing in this type of deal?
I was just starting out at my first career-job out of college, and I knew I wanted to aggressively save for long-term growth. I started to look at apartments to rent with my friend, then realized how cheaply I could buy a house- on top of renting out the second bedroom and then not paying my mortgage.
How did you find this deal and how did you negotiate it?
MLS. I met a great realtor who helped me find what I was looking for, and helped me identify a property in a great location with huge growth over the next few years.
How did you finance this deal?
FHA loan, 3% down.
How did you add value to the deal?
My boyfriend and I did the renovations ourselves and lived there throughout the renovations to keep costs low. I also had a friend who worked for LG which allowed us to get all new top of the line appliances for 50% off. Our leverage helped us save a lot of money.
What was the outcome?
We met our short-term goal of fixing up the condo to be able to put a large down payment on our next project- a bigger house with a yard to flip and live in.
Lessons learned? Challenges?
#1- track ALL expenses. My ~$20k is a rough estimate because there wasn't a solid or organized way that I was tracking my expenses.
