My first investment property!
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $86,670
Cash invested: $25,000
Sale price: $146,500
My first fix and flip, my wife and I lived here while renovating it, held it for two years to avoid capital gains tax.
What made you interested in investing in this type of deal?
The biggest factor is that I work in the construction industry, so fix-and-flip homes come naturally, especially since I did the majority of the work myself.
How did you find this deal and how did you negotiate it?
I told my agent that I wanted something that needed TLC and also that it needed to be below a certain amount, as it was going to be my first home as well as my first investment property. I didn't negotiate too much on the price as it was my first deal, still learning.
How did you finance this deal?
I financed it with an FHA loan.
How did you add value to the deal?
I used my finances as well as sweat equity to completely renovate the entire house, even going so far as to relocate a furnace so that the living room space would feel more open and inviting.
What was the outcome?
I was able to sell the property to another investor and made a clean profit of roughly thirty thousand dollars, which I put into the property I am currently working on.
Lessons learned? Challenges?
I didn't try to lower the price at all, which I think I could have, also, in hindsight, I wish I had held and rented it out. It was on my mind at the time, but I didn't want to overextend, so I just sold. Now that I look back, I think the better move would have been to refinance and rent it out using the equity to purchase another rental property.
