Single-family residence fix & flip investment.
Purchase price: $260,000
Cash invested: $30,000
Investment #13 fix and flip, or may end up being a buy and hold. Large, 4 bedroom 2 bathroom home in a great area. Rough estimates on light rehab are $30-$40K profit. We could heavy rehab over winter and clear $60-$80K if the market holds. May also make sense as a buy and hold as rents in the area are $2,300-$2,500. We have a lot of options here.
What made you interested in investing in this type of deal?
Location is fantastic, price was good, large house with new boiler and updated mechanicals.
How did you find this deal and how did you negotiate it?
Found this deal on our local MNREIA site. Seller wanted $280K and negotiated him down to $260K.
How did you finance this deal?
Cash funds from a private lender we have worked with in the past.
How did you add value to the deal?
We are going to do a light rehab of walls/ceiling repair, remove wall paneling, hardwood floor refinishing, wallpaper removal, etc. Our goal is to make it rent ready and see how the numbers work out. We will most likely simultaneously list it for sale and for rent after light rehab. If those options don't make financial sense, we will do a full rehab over the winter including kitchens, bathrooms, basement finishing and offer it publicly on the MLS.
What was the outcome?
So far, so good. Not too many surprises we can't handle.
Lessons learned? Challenges?
Before purchasing, I noticed the old field stone foundation was completely missing and replaced with a block foundation and addition sometime in the 1950's. After purchase, I talked to the neighbor and he said that the house was moved from another location. There are some settling issues and lots of cracks in the plaster. Not sure if this happened during the move of the house and was covered up with the paneling, or the house settled in onto the new foundation. Very interesting history.
I am surprised that the house "move" wasn't disclosed to you by the Seller. Seems like an important disclosure!
I am glad that you mentioned that you are considering to hold it as a rental. My husband and I sometimes hold our intended flips as they make more sense to hold sometimes. When the rental rates are strong and rising, sometimes the higher profit potential is in the 'hold'. And if you can add increasing appreciation to the mix, that is an added bonus!
Here's to finishing up strong! Best of luck to you.
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