Colorado Ski-In Flip Using OPM For Killer ROI
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $1,300,000
Cash invested: $16,000
Sale price: $2,000,000
With just 16k of our money, using creative finance, flipped this house in a ski-in location in about 50 days. Turned 16k into 530k after paying lender and private investor back. Don't let people tell you there are no deals out there. They are, you just have to look real hard.
What made you interested in investing in this type of deal?
We bought an airbnb in Breckenridge. The town put a cap on short term rentals right after, but excluded certain areas. We marketed to those areas to try and find another. A seller called us back and wanted to sell this property, made more sense to flip it.
How did you find this deal and how did you negotiate it?
Our realtor sent a targeted mailer to the neighborhood. He stated his price, and we knew it was a killer deal, so didn't budge. Gave him time to close, which he wanted.
How did you finance this deal?
We used a fix and flip loan. 1.3m purchase at 90%, 100% of reno (50k, which we didn't even use). Borrowed 250k from a private money lender (local attorney) at 10%, to be paid in a balloon upon the sale. He knew the area from being a skier, and that we had a great deal, he felt like his money was safe. He's since done another smaller one with us, and is ready to do more.
How did you add value to the deal?
We didn't need to. There were 2 vacant lots that closed across the street for 1m and 2m, so we knew the land alone was worth 1.5m minimum, plus there was a small house on it already.
What was the outcome?
Had pictures and video ready before we closed, and relisted for sale the day after we bought it for 700k higher.
Lessons learned? Challenges?
Great deals are out there, you just have to look really hard.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
A realtor helped find and negotiate, but we had to hold his hand quite a bit to ensure our contract was solid on the sale. He found us a great deal, but also made about 165k between both sides in 50 days. Not bad.