Jailbird Contractor Causes Flip Delay
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $142,000
Cash invested: $37,000
Sale price: $237,000
This was an off-market property that was brought to me by a contractor who has done quite a bit of work for me. I gave him $2000 for the referral, and we closed on the property for $142K on our LOC. It needed a kitchen and bath remodel, flooring and paint throughout, deck repair and staining, and some electrical and siding work. We also added a half bath in the basement.
The biggest challenge on this deal was getting it finished because my contractor got put in jail right at the end.
What made you interested in investing in this type of deal?
Flipping is one of my core businesses
How did you find this deal and how did you negotiate it?
A contractor I know brought it to me. The owners wanted a quick cash sale, as-is. I gave the contractor the work, and also a $2K referral bonus.
How did you finance this deal?
We bought it using our bank LOC.
How did you add value to the deal?
Full kitchen and bath remodel, added a half bath in basement, replaced flooring and fixtures, paint throughout, and an electrical panel replacement.
What was the outcome?
We made around $50K profit after soft costs.
Lessons learned? Challenges?
Don't be a bonehead and forget to check the electrical panel to see if it is a Stab Loc. Also, don't hire contractors who get put in jail!
