A Window of Opportunity: Broad Ripple Fix + Flip
The Property
This single family residence (SFR) sits in a quiet neighborhood across all the action that Broad Ripple has to offer. Initially purchased as a 3 bed / 1.5 bath, we added value by finishing the basement and adding a bath and spacious bedroom in the basement. With a finished basement, we doubled the livable square footage of the home in hopes of fetching a higher offer.
How We Found It
This deal was blasted on a wholesaler’s buyers list. Luckily for me, the wholesaler sent it out around 2am EST, which favored my time zone. Once we saw the deal, I knew this had a lot of potential.
How We Funded The Deal
Similar to the past deals, we went through a Hard Money Lender (HML). With the HML being fairly conservative with their ARV, we had to come out of pocket more than I anticipated. However, we were able to find a Private Money Lender (PML) to pay for my out of pocket expenses. Essentially, I put very little of our own money into this deal.
What We Did Wrong
We learned to order the big materials at the beginning of the project. Our scope included new windows and we had waited a few weeks to order the windows. This was a huge mistake as the windows were delayed almost 8 weeks, which resulted in more holding costs.
Back to the windows. The Project Manager / General Contractor (GC) had us in charge of ordering the windows. Since the GC had called in the order and had asked for us to pay for it, we assumed the order was correct. The GC missed 3 windows and the 2 of the windows from the supplier arrived damaged. We were then tasked to re-order the 3 missing windows and that was a disaster as we ordered the wrong windows. We should have gotten more eyes on the invoice before placing the order.
What we Did Right
Because our rental is about a mile away, we were pretty familiar with this part of Broad Ripple. We were able to run our numbers really quick and jump on this deal.
We were able to stick to the rehab budget, even with the increase in supplies and materials.
We were able to do something we did not expect, which was to find private money. This gives us a lot of confidence moving forward on approaching others on helping them grow their money.
This was the first deal we also partnered with someone. We were able to build a strong relationship with this partner and learn on how they operated which will help us implement and improve our systems and processes.
Conclusion
What we anticipated as a fairly quick turnaround turned into a 5 month fix and flip due to the windows. We also did not take into account on rehabbing a property during the excruciating winter months which resulted in expected delays on exterior work. The delays, I believe, were a blessing in disguise as we were able to put this beautiful home on the market during the spring rather than the winter as well. Low rates and inventory in the market also played a huge role in getting an offer over our listing price on the first day it went live on the market. We were able to get a 65%+ ROI and also helped our private partners grow their money...a win-win situation!
