Phoenix Historic Home Flip
Investment Info:
Single-family residence fix & flip investment in Phoenix.
Purchase price: $333,200
Cash invested: $129,000
Sale price: $565,000
This was a flip right in my wheel house in downtown Phoenix, Coronado Historic District. It took nearly 6 months to renovate and sell. We ended taking this one over from a previous investor who was foreclosed on.
What made you interested in investing in this type of deal?
The spread on this one was great! We acquired it so low in a neighborhood that was hot! Biggest factor for me is that I live close by so I can pop in there every day to check progress and I specialize in downtown as an agent. I knew the buyer for this home and how to maximize the dollar. It was easy to come up with a design and lay out to get it sold for top dollar.
How did you find this deal and how did you negotiate it?
This deal came to me from a lender I've known through the years. He knows I live downtown and I was actively looking for a flip in downtown Phoenix.
How did you finance this deal?
The same lender that foreclosed allowed us to carry on the house until we sold it. We payed the 20% down and carried the note.
How did you add value to the deal?
Ultimately different sells in the downtown Phoenix market. I wanted the high end buyer so I went high end finishes. From the Grohe plumbing fixtures, designer pulls & knobs, high end countertops, lifetime warranties on fixtures and appliances. Just going for the details and top dollar finishes that $500k + buyers look for and a design that you don't see in Phoenix. The other is curb appeal. The front yard and giant porch got us a ton of calls when the sign went up.
What was the outcome?
It took 5 months to renovate the entire project and ended up selling it before I could put it live on the MLS. I was pre-marketing it with my sign in the yard and our e-mail list with our firm and an agent I knew came with the buyer.
Lessons learned? Challenges?
Biggest lesson is, if you can, rip out the previous investors work. The contractors from before ended poorly installing plumbing, electrical and floors and we ended up paying for that through the renovation. Had we just ripped it out in the beginning, as we did with certain parts like the kitchen and bottom bathroom, it would have saved us time and money. Our original budget was $90k and we ended up at $129k due to those mistakes. Second mistake, fire your contractor if he keeps making mistakes.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, Andrew at Boomerang financial was great and Mark & Thomas at D.O. Capital Group were easy lenders. Jennifer Bayless at Lawyer's Title is the best title rep I've ever had and I've done hundreds of transactions in our beautiful state. She does all my title work for my investments and my clients.
