HUGE Profit on My First Rehab/Flip
by Chris from NJ
In May 2006, I learned of a property for sale by friends of the family, and I asked what they were looking for. When they told me the price, $180,000, I said I would buy it without looking at it. Since I was familiar with the area, I knew this was a huge deal.
There was a list of people who wanted this property, and I was second on the list. I kept in touch, and the #1 person backed out, so in November, I purchased a single-family home in my home town for $180,000, which was well below market value.
I used a credit line from my primary residence for the down payment, and financed a private loan for the full purchase price at a interest only rate of 6% with one point and a balloon payment at one year.
I received $12,000 back at closing and used that for expenses. I ended up putting $21,000 in updates and had my open house two months later.
I presently have a contract in place with a closing date of October 4th for $290,000. I'll make a profit of roughly $60,000 after fix up and all associated fees.
I know how lucky I was to find a property in this market with such a nice margin and do not expect to run into many deals as great as this one.
But it is definitely a nice way to start!