Fix and Flip Fort Worth 4-plex
Investment Info:
Small multi-family (2-4 units) fix & flip investment.
Purchase price: $195,000
Cash invested: $10,000
Sale price: $440,000
This was a distressed 4-plex in a very nice part of town. It had sat empty for some time.
$130,000 Rehab included:
Replace all water service lines
Sub metered electric
Replaced all windows
Repaired roof
Repaired rotten wood and sheetrock
Full paint inside and outside
New HVAC systems
Full rehab of each unit, new cabinets, granite tops, appliances, tubs and tiled surrounds, flooring, texture etc
What made you interested in investing in this type of deal?
I saw the opportunity based on location and deep discount in price.
How did you find this deal and how did you negotiate it?
Another investor wrote on a Facebook post that he had it under contract and couldn't get financing to close. I asked him for the address and jumped in the truck to walk it. Had to go thru and unlocked window. It was VERY rough but I love the ugly ones.
How did you finance this deal?
Hard money loan
How did you add value to the deal?
Completed updated it. Sub metered the electric.
What was the outcome?
Sold it for a nice profit.
Lessons learned? Challenges?
My contractors can fix just about anything. The city and utility providers were the only real hurdle.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Ryan Rite with Real Texas was the listing agent. He is a master marketer
McCaw Property Management leased up the property before selling.
@Kyle Mccaw that's awesome - I'm currently in Fort Worth now and have been doing some research and looking into neighborhoods, etc. for my first investment property...starting to realize strategies such as what you did above (Facebook posts, distressed properties) could be a good way to find a deal in todays market.
Thanks for the confidence boost.
A couple questions: you said 130K was invested in rehab. I assume you got that money from the hard money lender? Also, how long did the rehab take?
-Max
How much of that 130k for the rehab ended up being eaten up by holding costs? It sounds like a nice turn around, but my brain always craves the often untold story of money spent out of profit. I find in my own deals that the hidden costs, especially those associated with time always come back to kick me in the face. As I am a sucker for making the same mistakes multiple times, my face has grown a bit haggard over the years.
@Maximillian Doctor the actual rehab took 3 months. There was a ton of work. Oncor took 2 months on top of that to energize my property after the sub metering was done.
@Evan Shiels great question. The $130 was the rehab cost. My lending cost was ~$30k. I walked with ~$85k plus some rental income before it sold.
Originally posted by @Kyle Mccaw:@Evan Shiels great question. The $130 was the rehab cost. My lending cost was ~$30k. I walked with ~$85k plus some rental income before it sold.
Glad to hear it. Walking away with a good return after all the bills are paid is always a good feeling. I always find some area that I can improve in each time I make a deal, but being honest with myself about the potential costs and the chance of them happening (worst case) has probably been the best lessons. Rental income is always a nice cherry on top if it is a flip.