Worst FIRST FLIP: LOST OVER 100k
Investment Info:
Single-family residence fix & flip investment in Sacramento.
Purchase price: $350,000
Cash invested: $50,000
Sale price: $415,000
It was the worst first flip because we hired the wrong contractor who wasn't licensed. Ended up losing close to $100k including rehab, holding, commission costs.
Definitely the best learning experience on what not to do.
Since then, I have upgraded my own house.Learned to do cosmetic changes myself so i can be ready for my next flip. It's been a year and I have cash saved up to invest again :)
What made you interested in investing in this type of deal?
BiggerPockets inspired me go out and get into flipping ..
How did you find this deal and how did you negotiate it?
Myhousedeals.com
Negotiated it myself. It was a good buy- we just messed up on the rehab part.
How did you finance this deal?
Conventional financing. I am a loan officer so it was cheap to finance.
How did you add value to the deal?
We wanted to give it cosmetic changes but the contractor had plans of his own. He left the house in a worse condition than we bought it in.
What was the outcome?
Lost over 100k in holding, labor, rehab costs. Sold it to another more experienced investor in the area through a wholesaler.
We couldn't sell it through conventional ways because it was not going to get any type of conventional financing.
Lessons learned? Challenges?
Watch the contractors- only hire licensed recommended contractors. Be at the sight every day, buy the material yourself, don't be afraid to do the work yourself. DO NOT TRUST ANYONE WITH YOUR MONEY.