Single-family residence fix & flip investment.
Purchase price: $67,000
Cash invested: $95,000
Sale price: $229,000
This was a burn house that needed a major rehab. I think the only part of the house that wasn't damaged was the brick fireplace. I decided to do a small flip for my firsts out of state, but the numbers never seemed to work so why not start with practically rebuilding a house? The good part is nothing can come up once you open the walls that are not there. The first set of photos are before and last set after.
What made you interested in investing in this type of deal?
This Texas flip happened while living and California because of Biggerpockets.com and specifically starting with reading Long-Distance Real Estate Investing by David Green and 90 Days of Intention Journal by Brandon Turner. I decided to just invest in something different and new. I spent quote a bit of time researching how to flip. I would say after tons of researching, analysis, the one thing that made me pull the trigger was my mastermind group that BP put me with. They were relentless.
How did you find this deal and how did you negotiate it?
I went through a wholesaler to find the deal that told me the rehab would be $95k and it would sell for $210k. He also said he'd help me anytime. The rehab was right on and the selling price was more! He checked in on me on a regular basis and when I asked for advice from him, he gave me great advice and on more than one occasion went to the house to check on it and give me updates and even sent me pictures and videos. I paid his asking price.
How did you finance this deal?
I "paid cash" ,but I financed with a 401k loan, credit card advances (0% interest and 3% fee) and personal loan from a friend at 5.99%.
How did you add value to the deal?
I purchased it before seeing it (because I lost a couple deals) and then set up 4 interviews with my top pick contractors. I had my fiance (who is a handyman) fly out and interview the contractors and chose the one that referred me the deal. He was working on other projects in the neighborhood so he was able to see those.
What was the outcome?
This was sold through a realtor and I had a nice profit as well as learning quite a bit. The realtor was fantastic. There were were lots of bumps during the sale, but her knowledge and excellent communication skills make the deal come together.
Lessons learned? Challenges?
I learned the team of people that you work with is key. There can always be unexpected challenges but that should actually be expected. The sale wasn't going to go thorough until the last minute, so I also looked into renting out the house and leaned quite a bit while setting up my plan B.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I highly recommend my realtor, Sharon Tzib if you need a good realtor in the Houston, TX area.
Nice job! Did that purchase price include closing and wholesale fees?
Really nice job. Oddly enough I've done the reverse - live in Texas and did flips and add ons in Canoga Park CA! Congrats
Great execution! Fearless approach as well, nice work! From purchase to close, how long? Most first time out of state flippers flop, however you defied the odds with a great profit!
Wow, congrats! I guess this would simplify the whole scope of work, when you are doing a full rebuild.
I'd like to ask you which contractor(s) you used on the project, how you found them, and how that process went.
@Matthew Walsh Hi Matthew. Yes, the purchase price was my total out of pocket expense.
@Nik S. It ended up taking 6 months.
@Mark Sewell I had a wholesaler reach out to me from biggerpockets. I had then send me a few deals that I had to decline because the numbers didn't work. They recommended someone else to me that recommended a contractor. The contractor brought me the deal. I spoke to about 10 contractors that were referrals from a real estate agent, interviewed 4 and chose one. I chose the one that brought me the deal. He gave me about 13 referrals and I called them all and had my fiance look at his other jobs.
@Alex J. Nice! Canoga Park is challenging. I would love to stay local and may be able to at some point.
@Nik S. Yes I really think part if it was luck and finding an honest wholesaler that really worked for me. My goal in the low end was to break even so I'm happy with the results and I got a few trios to Texas out of it.
@Stacee Evans wow, very nice!
@Stacee Evans that looks fantastic, great job! Did you work with an architect for the design or is it something you more or less came up with yourself?
@William DeRosa I relied on the contractor. It was a 4 bedroom house and we kept the layout the same. The only change I made was to take out the wall from the kitchen and open it up to the living room. My contractor used to do flips and he was familiar with what works in the neighborhood. His fee just included everything.
Awesome job. That's a pretty decent size rehab for your first OOS flip. The next projects you take on will be a breeze with this one under your belt.
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