Lost Money on First Deal

[Norberto Villanueva]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $220,000
Cash invested: $10,000
Sale price: $240,000

Just a light cosmetic flip

What made you interested in investing in this type of deal?

Jump in the water

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

Off-market. Not very well. Paid too much!!

How did you finance this deal?

Private money

How did you add value to the deal?

Replaced some carpet, refinished wood flooring, interior paint, light kitchen remodel

What was the outcome?

The private lender offered to split what little profit there was, which meant not keeping to the terms of our agreement so I declined and made no money!!

Lessons learned? Challenges?

You make your money when you buy

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was the investor and selling agent.

[William Thompson]

Classic lesson right there—you don’t lose money on the rehab, you lose it at the buy. I see it all the time with investors I work with. Off-market deals can be gold, but only if the numbers make sense from day one.