I have been a real estate investor for 12 years. The following story is about our most recent “flip”. First of all, we only buy in specific towns in New Jersey that have proven resale values and are attractive destination area's for buyers.
This particular deal came available during a time when cash was short due to other projects, but that didn't deter me from making an offer. The offer negotiated was for an amount that was $15k over asking, but I knew from my research that this property (even in this market) was priced lower than it should have been. The offer included an $11k give back to us at closing giving the sellers a gross of $4,000 over their asking price.
Once accepted there were three trips back to the property to complete our construction scope. At that point I had to find money to close the deal. I spoke with many investor friends and finally found one that was ready to do a deal and had cash to close the transaction.
Sure the house, as it turns out, was a complete gut job, right down to the orginal house frame, that included all of the electrical and plumbing systems.
We closed and immediately began our demolition phase of the project which took three days. We then got the roofing and siding completed and had the plumber and electrician complete their work. The finishing was a challenge, as we had two of the contractors delay their start dates. This wasn't so bad actually as they, by contract with us, had to pay $250 per day that they started late.
We collected their penalty money and then fired them because they were too far behind with no attempt to catch up by working a larger crew or extra hours. Our back-up crews (you should always have them) came in and finished the projects. The rest is history! $72k after expenses in 110 days which I split with my investor friend.
Now, I want everyone to know that this was by far my easiest deal to get done in the last three years. Who says this can't be done in this market?