Single-family residence fix & flip investment.
Purchase price: $40,000
Cash invested: $64,500
Sale price: $145,000
A fix and flip single family home, 3-Bedroom, 1.5 Bath, bought with hard money loan of $40K. We put $64,500 into it and sold it for $145k. We did a ton of work, new floors, doors, windows, kitchen, bath, driveway, deck, gutters, shingles, painted outside, etc. Pretty much replaced or repaired everything. We also jacked the roof up and added a knee wall in the attic, which we then insulated.
Started work 1st of September and closed on January 27th. All work was done by the end of November, but we had to redo a portion of the deck for code and fix a few tiles in the kitchen.
What made you interested in investing in this type of deal?
The house had great potential in a really nice neighborhood in Auburn, Maine. The market was starting to pick up for good 3 bedroom homes and thought we could make a decent profit on it.
How did you find this deal and how did you negotiate it?
I saw this on the mls for $42k and thought it would make a good flip. A couple of friends happen to mention they were interested in doing a flip, so I sent them the address. We offered $40k and it was accepted.
How did you finance this deal?
Hard money loan from a friend of one of the partners. We ended up paying back $44k on a loan of $40k. Most of the materials we paid for with credit cards, most with Lowes for 5% discount, but also Home Depot taking advantage of their deferred interest payments.
How did you add value to the deal?
Completely remodeled the house. Made the kitchen and bath bright and modern, removed some walls to create a more open concept. Painted the outside after installing new windows, doors and adding shingles were needed. The place had no driveway to the garage! We added a new driveway and cleaned up the landscape and also removed trees from in front of the kitchen and dining windows to brighten the inside. Removed the old deck and created a wrap around deck. New plumbing and electrical where needed.
What was the outcome?
The place came out amazing! We listed for pie in the sky at the time for $159k and we aggressively lowered the price to $150k after the first week to hit the $150k price point. That week we had an offer and accepted $145k, which was our target at the start anyways.
$145k - $44k loan - $64.5k expenses = $36.5k in profit. Not bad 5 months from close to close.
Lessons learned? Challenges?
Always pull a permit! The city considered it a new deck not a repair of an old deck. We ended up taking part of it down and redoing it to meet code. Lost about $3k there.
Know your area, we could of saved a few thousand more by not putting in tile in the kitchen and bath.
We had 4 partners in this deal and we picked people for certain things to be approved and they would have final say on those items. That helped a lot with keeping the project moving along at a fast steady pace.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Fontaine Family - Clayton Larochelle agent
An after shot of the back.
A few more pics
@Carl Hebert this is awesome!
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