Single-family residence fix & flip investment in Crestview.
Purchase price: $73,000
Cash invested: $250
Sale price: $177,000
Great starter flip! Overall, the deal netted $40,000. As my first deal, I utilized an equity split with my investors. I only invested $250 of my own money into this deal ($ to start the LLC and the bank account). Half of the cash came from another investor's SDIRA and another came from an investor's savings. In the end, I walked away with ~$12,000 after only investing $250. :)
The house itself needed everything replaced except for the roof and water heater ~
What made you interested in investing in this type of deal?
I didn't have the time required to wholesale, but my goal was to raise capital as quickly as possible. Flipping was the next obvious choice. After attending Flip Hacking Live 2018, I was inspired and motivated to crush it!
How did you find this deal and how did you negotiate it?
I found it through a local wholesaler, Arianne Lemire, whom I met through local meetups/networking events. She was originally asking for $79,000, but after walking through the house, I offered $73,000, which she accepted! (Side note, she bought the house for $55K, which I knew from the county records. I was completely happy for her to earn her portion in this deal.)
How did you finance this deal?
An investor from Texas reached out to me after I posted a video about Self Directed IRAs on my YouTube channel. He wanted to fund a deal with me for about ~$80K total. Another investor, whom I met through Bigger Pockets, wanted to fund the rehab portion (~$45K). We agreed on an equity split because this was my first deal, I was happy to offer more of the profit for their willingness to bet on me.
How did you add value to the deal?
I brought the deal together and managed the contractors. I also ran all paperwork to make this process completely passive to my investors. They never even entered into the state of Florida, let alone saw the house in person.
What was the outcome?
Overall, the LLC that we created netted $40K in the deal!
Lessons learned? Challenges?
I learned a lot about specific processes to have in place. Timelines are crucial to establish before any work begins! We had some timeline creep at the end, where I had to motivate my contractor to move faster.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I was the agent in this deal. I would highly recommend Arianne Lemire as a wholesaler, though. She and Chris (her husband) have a great thing going with core values of integrity and hard work backing themselves.
@Matt "Roar" Gardner thank you for sharing. This is awesome.
Did you work in any real estate or anything before this? Would you recommend flipping for newbies in real estate? I want to start in WA just unsure how to find an investor.
@Amia Padero - my pleasure :) I hope it inspires you to do the same! I got my real estate license about 3 months prior to this first flip happening. I was/am a fighter pilot in the Air Force, and real estate was never in my purview until I came across Rich Dad Poor Dad and Bigger Pockets. Since then, I've completed one flip, with my second underway. I've purchased an AirBnB for $565K and have my second under contract. I have also sold over $2 mil of real estate on the realtor side of the house ~ It's been a grind, but I love it!
What a fantastic first success Matt! WOW! Roar is definitely your name. Way to crush it!!! And mega congrats!!!!
Thanks for sharing this amazing story Matt. Most importantly for me was the little cash capital you put in, that was very smart. Quick question, what was your split arrangement with investors, I f I may ask? I have a couple of people asking to join venture with me on projects, $0 cash down from my end, but %100 sweat equity. What do you think is fair to offer?
@Share Ross - Thanks for the kind words :)
@Gbenga George - Yeah, it was a huge win for someone like me who didn't have a lot of cash to play with. I'll be honest, I spoiled my investors in this first deal. I was completely happy to do this in my first deal as well. I knew I just needed to get this first one out of the way before I utilized more conventional lending splits/practices.
For this deal, I owned a 30% equity in the company after all investors had recouped their initial investment. So from that $40K profit for the LLC, I pocketed about $13,000. I also acted as the Realtor and earned and additional 2.5% on the sale on top of that. I wanted to always factor in a Realtor fee because as I grow, I'd like to be able to hand that duty off and earn some more free time back for myself and my family.
@Matt "Roar" Gardner
Nice work! Now onto the next one.. look forward to reading about it.
@Matt "Roar" Gardner Well done! Congrats on such an awesome deal!
Congratulations @Matt "Roar" Gardner. We have a meetup scheduled in PCB this week on Wednesday... Hope to meet you there!
Never think of it as spoiling your money partners.. I see this on BP all the time.. folks trying to launch looking for private lenders and wanting to pay bank rates.. which is simply a big joke.
you did the right thing investors can be life long you treat them well and you will have all the cash you need.
never look at it like your spoiled them.. thank them for giving you the opportunity to make money without putting any thing up.. plus the listing etc.. this is how I started my career and to this day even with oodles of deals under my belt my investors still make the most .. keep it that way.. until you can do a few on your own.. then you get 100%
Again the biggest stumbling block for those starting is to just not understand how private Money REALLY works.. not this fantasy that there are all these private lenders that are going to be lining up to lend money for less than HML rates..
on top of that getting paid to fly a fighter jet how good is that.. I am so jealous.. Your going to do very very well just keep honoring your investors..
@Yolanda Salas - Thank you! Sadly, I won't be able to make it out this week. I have some school orientations for the kiddos, but I am posting my next meetup on BP and meetup.com (https://meetup.com/Real-Estate-Investing-Meetup-Niceville/) for the following Wednesday.
@Jay Hinrichs - Thank you for your perspective :) I definitely appreciate my investors being so willing to trust me with their money. I am definitely looking forward to the future!
Thanks for sharing all those details, great job!! Do you know if that wholesaler only works in the panhandle or looks for properties in other parts of the state?
Congrats on your flip! Can't wait to hear more!!
That is awesome. I live in Tallahassee, and am about to rehab a gulf breeze house. I love hearing stories like yours. Keep it up
Impressive start Matt! You certainly seem to be grinding away and succeeding! Wishing you more luck and cant wait to hear more!
@Matt "Roar" Gardner Congratulations!! You did an amazing job from being persistent in finding a good deal to start with, managing the renovation and contractors that come with it, to listing and getting a great offer! I agree with taking good care of your investors - we do as well, but we gotta get you started with lendinghome so you can get some good hard money rates too ;) Looking forward to working with you a lot more!
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