Our First Flip - Spring 2017
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $110,000
Cash invested: $35,000
Sale price: $225,000
This was our first flip. Looking back this property was a breeze compared to problems we would face in future homes, but we cut our teeth on this one. Thankfully, we had a friend walking through the process with us. We used this flip to afford walking away from a publishing deal, and in a God-wink type moment, this home made us more money than the publishing deal would have made us.
What made you interested in investing in this type of deal?
I was looking to walk away from a publishing deal (Songwriting(, so I could own my own music catalog. We had a friend who we knew did something in Real Estate, but we had no clue what. We now know he was a wholesaler. With two screwdrivers to our name I called him and asked him if he'd be interested in flipping a house with us, and a week later he found this amazing opportunity.
How did you find this deal and how did you negotiate it?
The deal was brought to us by our friend who is a wholesaler. Someone had passed away and the siblings were looking to unload the property as quickly as possible.
How did you finance this deal?
We looked for weeks, but finally found a product called a Subject To Completion loan that was based on the ARV of the home. We didn't end up spending a dime of our own money on this deal.
How did you add value to the deal?
We essentially cleaned it up. The home was a wreck when we bought it, smoke yellowed walls, dog hair and feces (yep) on the floor, and loads and loads of junk left behind. Once we got the place cleared out we realized there wasn't much to do. We added a new roof, new landscaping, paint, foundation repair, and a fence.
What was the outcome?
When we bought the house the ARV was appraised to be 205k. We decided to test the market since Nashville was booming, and we listed at 215k, and got an offer the same day for 225k.
Lessons learned? Challenges?
We later would learn on future projects that the things we thought were issues on this home weren't really issues at all, but this home taught us to deal with the emotional roller coaster of the unexpected, and I think learning that is the most valuable thing we've learned in Real Estate.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Our friend Scott Stephens walked us through this project, and we had a great realtor team, The Clough Team who was with us every step of the way. We highly recommend working with both!
