Updated almost 4 years ago on . Most recent reply
Leominster Flip - My First Time Managing the Project
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $215,000
Cash invested: $50,000
Sale price: $400,000
We bought this house with the plan minor updating upstairs and adding space downstairs. We saved money by keeping the cabinets and adding new doors and hardware in the kitchen.
Purchase Price Plus Purchase Costs - $225,859.72
Rehab Costs - $79,829.79
Holding Costs - $9,153.13
Selling Costs - $22,591.03
Profit - $62,565.43
What made you interested in investing in this type of deal?
I know the market very well here having lived and worked here most of my life. Also, this project had most large repairs such as the roof and heating system already complete. After viewing the basement I knew we could add a lot of square footage and a bath to greatly enhance the value.
How did you find this deal and how did you negotiate it?
This deal was found through a postcard sent to absentee owners. I viewed the property and gave them my number. He came back with his higher number and then I gave him my drop dead number and told him I could not move anymore. After thinking about it for a day he called me and accepted the price
How did you finance this deal?
This deal was financed through Hard Money and a Private Money Lender
How did you add value to the deal?
We finished about 600 square feet in the basement moving the home living area from 1400 to 2000 square feet. We also added a bathroom in this new finished space. The whole upstairs was cosmetically updated and new countertops added to the kitchen
What was the outcome?
A successful flip that earned more then projected when originally purchases. We went over our rehab budget by $10k, but sold the home for $20k more then originally underwritten at
Lessons learned? Challenges?
1) When in doubt call the city to see if you need a permit. This cost us another 14 days hold time
2) FHA Loans need a 3 month hold time before the loan can be summitted. It is not until closing. This costs us another 30 days of hold time
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Cutter Hill Capital was the hard money lender and are very easy to work with. The agent really knew his market and was amazing (ok bad joke, the agent was me)
