Investment Info:

Single-family residence fix & flip investment.

Purchase price: $28,000
Cash invested: $20,000
Sale price: $80,000

We purchased this property on 11/13/19 for $28,000 off-market.
Property details: 1,430 Sq. Ft. Vinyl Bungalow on Crawl. No Garage. 3 Bed 1 Bath.

Rehab took a month.

Property closed on 3/13/20 without any concessions.
After paying all the closing and holding costs, we netted $23,682 (49.33% ROI!) in just over 4 months :-)

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

I am a local Michigan Real Estate Broker with many years of experience in property management, construction management and everything real estate. I know this area very well and I knew a large bungalow like this will sell like a hot cake to first time home buyers, especially because we would be able to convert it into a 4bd/1.1ba from a 3bd/1ba.

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

It was a distressed home off-market. My team initially got in contact with the seller while driving for dollars. The seller was an elderly disabled man with no help in and around the home. We promised him that he wouldn't have to put a cent on the house, no closing costs and we would buy the house as-is with everything inside it. The rest was easy once we were able to pin on his pain point.

How did you finance this deal?

All cash, total investment was ~$49,000 ($28K purchase, $20K rehab and $1K closing costs).

How did you add value to the deal?

1. converted this 3bd/2ba into a 4bd/1.1ba by dividing a large bedroom into two and converting a large walk-in closet into a half bathroom.
2. changed flooring to basic home depot grey laminate
3. Painted entire home grey and white trims
3. Painted the kitchen cabinets to white and changed the counter top to a matching laminate top.
4. upgraded the light fixtures
5. Ceramic tiling, basic HD grey vanity, new light fixtures in the
6. painted exterior trims and deck.

What was the outcome?

$23,682 net profit (49.33% ROI) in just over 4 months :-)

Lessons learned? Challenges?

Holding cost was little higher than expected due to brutal winter in Michigan and high energy cost. I would estimate more for snow removal, gas bill etc.

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

We listed the property through our brokerage Amin Realty for $84,900 on 01/08/20.
Within 2 weeks (despite of winter), we had an in-house from one of our first time home buyer clients for $80,000.
We decided to accept the offer because it was a) conventional mortgage b) 20% down and c) we didn't have to wait 120 days for the FHA guidelines.