Investment Info:

Single-family residence fix & flip investment in Colorado Springs.

Purchase price: $285,000
Cash invested: $5,000
Sale price: $445,000

My team and I started to look for distressed properties in Colorado Springs. We found this one after our ISA called in about it. Purchase price is 285k with a 65k rehab estimate from 2 different General Contractors. It's ARV is between 470k and 500k. We had plenty of issues getting funded (including getting scammed by a fake hard money lender for wire fraud...), but eventually was able to partner with a highly experienced local investor to help fund and partner on the deal. Learning plenty of lessons along the way, and I'm certainly more prepared for our next deal which should be coming up very soon...

UPDATE: We sold it $450000... Didn't make any money on the actual profits outside of the commission though... What went wrong was that we ran into a ton of unexpected repairs that we had to make after we already already completed the house. The GC that our investor partner brought in turned out to be unskilled, unreliable and really messed up the entire project. We ended up having unresolved mold issues, sewer line holes, possible structural issues that ended up costing us at the end. I can honestly say that we were lucky to not take a bigger loss than we did ($4,000 in total). I am grateful for this experience however, because I learned what NOT to do when flipping a home.

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

Cold calling foreclosures. Showed up as a listing appointment and presented a cash buy opportunity. Seller took it and we were off to the races.

How did you finance this deal?

Hard money. Outside investors brought in the downpayment.

How did you add value to the deal?

Brokered the deal, managed the contractors, picked out the materials.

What was the outcome?

4k net loss for all parties. Made some of that back on the commission. Definitely could have turned a profit if we were smarter on the initial inspection and chose a better GC.

Lessons learned? Challenges?

1. The cheapest GC isn't always the best one... You really have to vet them and see what they've done in the past and how the numbers on their end panned out vs what they promised. 2. Before getting into any kind of arrangement with other investors please make sure that you have a Joint Venture agreement that outlines who is putting in what kind of work and money BEFORE going under contract. 3. Don't be afraid to walk away during the inspection period. You make money on the buy, not the sell.