Flipping my second house at 21 years old
Investment Info:
Single-family residence fix & flip investment in Columbus.
Purchase price: $10,000
Cash invested: $60,000
I Bought this flip house after flipping my first home. It needed a full gut job down to the studs. Currently all new sheetrock is hung and tape, mud, and texture should be started next week.
What made you interested in investing in this type of deal?
The house sits on a corner lot close to the high school in my town, so it is a great location. The house has sat vacant for a few years and was in very rough shape. The house is over 100 years old and has tons of character.
How did you find this deal and how did you negotiate it?
I actually knew the owner. He owns a few rental houses in my home town and 3 Ford dealerships. He knew about my first flip house so he mentioned this house to me while we were golfing one day. I knew he had been sitting on it for a few years without it being rented and it was just costing him money. He told me he wanted $20,000 but I offered $8,000 cash and we ended up settling on $10,000 cash.
How did you finance this deal?
My mom owns some storage units that are owned free and clear. I talked her into letting me pull out a line of credit on the equity in the storage units if I paid her property taxes on them. So I now have a $120,000 line of credit to work with.
How did you add value to the deal?
Full remodel, new siding, windows, sheetrock, flooring, paint, bathrooms, plumbing, electrical, etc. I also changed the house from a 4 bed 1 bath to a 3 bed 2 bath with a huge master bathroom and walk in closet. The house will be pretty close to brand new inside and out.
What was the outcome?
Not sure yet, looking at comps I am hoping to sell in the $120,000 range so that would be roughly $50,000 in profit.
Lessons learned? Challenges?
Old houses will always have issues the more layers you peel back.