My First Project - Dipping my toes before I cannonball

1 Reply

Investment Info:

Single-family residence fix & flip investment in Louisville.

Purchase price: $80,000
Cash invested: $99,713
Sale price: $182,500

Contributors:
@Jay Leisten

This was my first attempt in flipping. I purchased two lots side-by-side for $80k. In the end. My profit was a whole lot of knowledge and a buildable lot in an up-and-coming area, free-and-clear. Things that went wrong could have been avoided and I could have sold this a year earlier, but pivoting to a rental allowed me to gain even more experience in the end along with some income. All-in-all I would say this was a success that could've been a home run. Eh, I didn't lose money!

This is just the beginning.

What made you interested in investing in this type of deal?

It was a deal that made sense with running my numbers. I felt I had a good cushion in case things didn't work out for me the way I thought they would. Which is normally the case. There were multiple exit strategies of which I used 2.

I also wanted it to need a gut renovation. That allowed me to learn more on the process of putting it back together.

How did you find this deal and how did you negotiate it?

I found this deal through an agent I found on BP. He found this deal from a wholesaler in the area that he has worked with before.

How did you finance this deal?

I financed with a HELOC from another property that I had househacked.

How did you add value to the deal?

I did a gut flip on one property. The second property was burned out pretty bad. It was demolished and now we have a flat lot.

What was the outcome?

After initially listing in the summer of 2018, we had a deal fall through after the home inspection. After scheduling and completing the necessary repairs, it was closer to fall and we decided to rent instead of sell. Tenants ended up not working out and we evicted in June of 2019. Decided to list again - at a higher price - under contract in 2 weeks.

Lessons learned? Challenges?

Get a home inspection, a sewer line scope, and a foundation inspection on every property you purchase if you don't know what you're doing. ~$500 will never be better spent.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I would definitely recommend my agent, Jay Leisten. He was a wealth of knowledge and advice throughout. He still and hopefully will be for a long time to come.

@Brian Jackson you were a really great client to work with in terms of understanding the pitfalls along the way that may come up. I’m happy to know you now as a friend, client and fellow investor.

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