Single-family residence fix & flip investment.
Purchase price: $199,000
Cash invested: $40,000
Sale price: $353,000
Live-in flip with FHA 203k loan
What made you interested in investing in this type of deal?
We saw this as our way "in" to REI. We were 24 at the time with not a lot of money for down payment. Although we would have loved a cash positive multifamily right off the bat, it just wasn't feasible for our situation. So we made it work!
How did you find this deal and how did you negotiate it?
Hours upon hours of scanning all the usual sites. The house was being sold “as is”. We put in an offer 15k below asking and settled on 2k below asking. For us, this was fine. We knew the worth of the property in our area which was fair.
How did you finance this deal?
How did you add value to the deal?
Renovated almost the entire house:
- added central HVAC
- new roof
- new windows
- new engineered hardwood throughout
- removed walls for more open concept layout
- entirely new kitchen with more functional layout
- waterproofed and treated cedar siding,
- renovated both bathrooms
- new hot water heater
- new entry doors
What was the outcome?
Blood, sweat, tears, and $105,000 in profit!
Lessons learned? Challenges?
While it theoretically makes sense, live-in flips are HARD. At least to the extent that we renovated. It was very challenging going with out a kitchen for almost 5 weeks. Keep in mind we also worked full time. We would go to work, come home, work on the house until 9,10,11pm and repeat. Living in your work space is not ideal. I say I wouldn’t do it again, but if an opportunity like this one came up again, we would jump on it.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Real Estate Agent - Joe Dino: Keller Williams, Shore Property Group. Joe has dabbled in REI himself which made it so easy to work with him because he had full comprehension of our goals.
Congrats! Did a similar thing with my house! Glad it built so much equity for you!
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