Proof that margins matter

1 Reply

Investment Info:

Single-family residence fix & flip investment in Norfolk.

Purchase price: $165,000
Cash invested: $56,320
Sale price: $250,000

Off-Market property bought after months of negotiation. Initial rehab was $19,744. During the sale process, replaced the roof, and made additional repairs requested by the buyer.

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

The property didn't require a huge rehab, and had a significant margin. Original estimates had a $50K profit.

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

Found this property using Facebook Marketing. Negotiated over several months with seller. He needed time to be comfortable with the sale because it was his mom's house.

How did you finance this deal?

Hard Money Lender.

How did you add value to the deal?

Marketed the property during the rehab process using sign in the yard. The buyer contacted me before we ever got started on the rehab, and as soon as we finished, we got it under contract.

What was the outcome?

Initial budget was busted as we started negotiating additional repairs during the sale, including the roof.

Lessons learned? Challenges?

Having a significant margin is what saved me on this deal. My initial profit margin was $50K with a final profit just over $15K.

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

Mike Krumbein with Richmond Mortgage. Jenny Colón, attorney.

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