Updated over 4 years ago on .
Part Wholsale / Part "Fix-N-Flip" in less than 45 days.
Investment Info:
Small multi-family (2-4 units) fix & flip investment.
Purchase price: $67,000
Cash invested: $2,300
Sale price: $90,000
Not really a fix and flip but not really a wholesale deal either. Purchased this property from an investor with a portfolio looking to liquidate. Property was completely occupied and had recent updates. Nothing wrong with the property or major repairs needed. Cosmetic updates would be needed in the future to update the rents. Purchased at a low price knowing there was defintely more value in the property as-is. Owner just wanted to liquidate some properties quickly to get cash. Within a few days, had it under contract with an investor wanting to buy and hold and BRRR after cosmetic updates and rent increases. Put in about $2,300 in minor repairs from inspection report. Although I sold at $90k, it appraised for $107k. Definitely a win for the buyer and a win for me.
What made you interested in investing in this type of deal?
I knew it was going to be a quick turnaround and I also had an investor looking for a BRRR type deal. This one was perfect. It was a win for me and a win for him.
How did you find this deal and how did you negotiate it?
I was able to connect with the owner through a husband-wife wholesale team that I work with often. We actually partnered on the deal.
How did you finance this deal?
Paid cash! Offered a quick close for the owner and knew my money would only be sitting for a little while.
How did you add value to the deal?
The biggest value add was for the end buyer. I was able to find him a great property that still appraised well over the amount I sold it for. The value I brought to the table was being the connection. I had the funds to close and found the end-buyer.
What was the outcome?
Sold for $23k more than purchased in less than 45 days. Also, was able to collect some rent while holding the property which was an added bonus.
Lessons learned? Challenges?
Push the numbers. Could've gotten a bit more out of this deal. Challenges were mainly tenants. Took over the property and immediately hit them with an inspection, an appraisal and repairs. Lots of inconvenience for them so took some schmoozing to smooth it all over and keep them happy. In the future, I'll get copies of leases prior to closing. The rent amounts were $50 total less than what I was told. Not huge but still an issue.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Aaron Chapman at Security National Bank is awesome! He was the buyer's lender and I've worked with him and his team on many deals. They're always pulled together and great at communicating.
