We all know there is great financial risk in the world of fix and flip. Things go wrong when we least expect them; often, it's outside of our control. Well, this borrower faced unfavorable variables, and yet, walked away richer than most.
Although not new to the industry, this flip was the borrower's first. Perfect Phoenix location, on a great lot, nestled in the middle of the neighborhood. The home was purchased so well that her large margin provided an incredible safety net when major unexpected issues were discovered. Despite having a full price offer within the first week of being listed on the market, the process to close lasted over three whole months because of issues on the buyers' end.
But check out those numbers! A nice profit, to say the least. I guess the experts aren't kidding when they say, "You make your money on the purchase."
Acquisition Loan Amount: $132,000
Construction Budget: $50,000
Construction Draw Allowance: $35,000
Cost of Loan (approximate): $12,000
Loan Length (approximate): 7 months
Purchase Price: $165,000
End Sale Price: $315,000
Location: 7th Avenue & Campbell (Phoenix, AZ)