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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 May 4th, 2007 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!

 
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