First Flip HOMERUN turned $140k profit

17 Replies

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $75,000
Cash invested: $3,000
Sale price: $312,000

Home run! I found this house on FB Marketplace for $75k. Right away I said, "this is a $240k house all day long". Asked a friend to look at it with me, my first ever project, he mentioned the great potential and him and his wife offered to partner and finance the entire thing using his capital and LOC's. COVID hit and we were hesitant to continue closing on it not knowing what the market might do. I knew we got it at such a good deal, we almost "couldn't" go wrong. Then the market went crazy. We did A LOT of the work ourselves. And what an amazing learning experience it was! Our partners were very gracious teaching along the way from their several several years experience. October we were considering marketing it for $265k... I thought, no way! No less than $285k. My wife said, "um, higher.." We marketed for $297.5k FSBO and only 5 days until we would "gather and go through the offers". That worked. First offer was $300k. With just at $162k all in, Wednesday we accepted the offer of $312k. What. A. Journey!
Please go to my FB and see how beautiful it turned out.
My wife and I will close on our second planned flip by mid December 2020, a couple weeks before closing on the first.

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

I was searching for my first "something". I was just looking for a value add opportunity. I had enough research and knowledge to be dangerous and decided it was time to START. Luckily I was blessed with a person who knew what he was looking at to help me analyze the property. AND offered to partner on it. I knew the property was a potential Homerun with the location just outside of Topeka, most desired school district, beautiful 3.8 acre lot, off the main road boxed in by beautiful hardwood tree

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

Found on FB Marketplace after being up for 42min, I messaged him to see it ASAP the next day. He agreed, I looked at it and said I'll take it. The next day I offered $70k but he had tremendous interest in the property, so I immediately said $75k it is! I had No Money. No experience. But I knew I had a deal. Boom Baby! I was excited and scared shitless! That's exhilarating, try it!

How did you finance this deal?

Partnership 50/50 that was later after all said and done, negotiated to 35/65. Partner funded entire purchase and rehab. He just paid his latest LOC off. Like in bowhunting, I'll take lucky over good any day. He was a great partner!

How did you add value to the deal?

Finished entire unfinished basement. The house was a complete gut. Repaired the foundation ourselves. new roof, new hvac, lots new plumbing, new everything, added an egress in the basement to make it a 3/3. 1970s house brought to life in 2020, covid not included.

What was the outcome?

Purchase: $75,000
Rehab: $87,000
All in price: $162,000
Sold: $312,000
Profit: $140,000
Partnership Split: 35%/65%
Unreal!

Lessons learned? Challenges?

We had great partners. They are good friends. We were told that's a bad idea. It's not a great idea, unless you have the friend's that we did on this one.
#1) Record what you do in the process. from time put in Each Day, to what you spend, but especially the time and skill accountability. In a partnership, it's important to value what you do
#2) If it's your first understand the learning & experience is gold. value that.
GO FOR IT. And the real #1, Family first.

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

We bought FSBO. We were able to sell FSBO. but my partner handled all legalities and title and contracts and funding and most all that. I am learning that as we speak for our next flip on our own.

@Steve Zeckser

Awesome deal! The thing that is most impressive about this is all the work you did researching the market to know when a deal was a deal. That is one of the major hurdles folks face and knowledge of the market is really the only way to get through it. Nice work!

You knew what value looked like in your market and most importantly you capitalized when the situation presented itself. You’d be surprised how many people lose out on deals like this because they doubt themselves. Congrats. 

Originally posted by @Lee Ripma :

@Steve Zeckser

Awesome deal! The thing that is most impressive about this is all the work you did researching the market to know when a deal was a deal. That is one of the major hurdles folks face and knowledge of the market is really the only way to get through it. Nice work!

Lee!! I’m just finishing listening to your BP podcast. I love it! 

Thank you for the kind words. I’m about to restart your episode while in the gym. I’m enjoying you and the guys talk about apprenticeships. So valuable! That’s exactly how I viewed this deal. I told my wife, if we make $0, I made $100k + in experience and knowledge.
I have some interesting ideas for the Topeka area. Not far from Kansas City. There’s some huge opportunity potential‘s coming to the Capital city. I’d love to connect with you about some of my ideas as I feel I could be of great service and add value to you. I haven’t figured out the tiny home idea (which has been running through my mind as well), haha. But I’m still brewing proposals. Take care.

 

Originally posted by @Michael Noto :

You knew what value looked like in your market and most importantly you capitalized when the situation presented itself. You’d be surprised how many people lose out on deals like this because they doubt themselves. Congrats. 

Thank you, sir! I feel I did exactly that. And! I didn’t hesitate going for it which I’m most proud of. That’s what was holding me back.

 

Man, who would have thunk a deal like that could be scooped up off Facebook Marketplace.  Then you guys hit it like a bunch of pros, and it sounds like it wasn't a light rehab either. Congrats!! 

Originally posted by @Mike D'Arrigo :

@Steve Zeckser congratulations on your home run! Why was the seller so motivated?

Hey Mike, thanks! The seller was the son who grew up a short time in the home. His mother moved out and left it vacant for about 10 years. In that time, it was robbed of some copper and such. The son had started to rehab the gutted house with intentions of "some day finishing it". But being a full time truck driver it was wearing on him more than anything. So the home was gutted and he had re-drywalled the upstairs along with electrical. He just wanted it off his hands. 

 

Originally posted by @Steve Zeckser :
Originally posted by @Mike D'Arrigo:

@Steve Zeckser congratulations on your home run! Why was the seller so motivated?

Hey Mike, thanks! The seller was the son who grew up a short time in the home. His mother moved out and left it vacant for about 10 years. In that time, it was robbed of some copper and such. The son had started to rehab the gutted house with intentions of "some day finishing it". But being a full time truck driver it was wearing on him more than anything. So the home was gutted and he had re-drywalled the upstairs along with electrical. He just wanted it off his hands. 

 What a great deal!

 

@Steve Zeckser

When preparation (and a little bit of luck) meets opportunity you find success. Grear job! Was your intention to get a quick win in order to move that cash into the next deal or what was your thinking?

Reading your story I was thinking you guys were doing a BRRRR at first, keep the Cashflow and pull your money out to put into the next deal.

Either way it was a great win, thanks for sharing!

@Steve Zeckser   was this house in Topeka?

Live here - so curious - that was a homerun -- I'm from Wichita and the housing market here is wack compared to there.  Houses sell for a lot more - and most are not updated or very well taken care of for what you pay IMO.  Wichita spoiled us and our expectations.

Only saw the one photo but looks very nice.   I'm planning to build a new house beside my existing one in Berryton - hope we can start in the spring.  I live right on the E Side of the base - you've probably flown over our property a lot if you are at Forbes.

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