What’s That Smell? The Plot Thickens.

     A lot more people saw the previous post about my hoarder house than I would have thought. If you were one of them, thank you. If you missed that post the link is here:

     What’s That Smell? Not Cat Piss ─ It’s Opportunity.

     In that article I outlined three possible exit strategies. Some people asked me what my favorite option of the three would be. I didn’t really have a favorite but the wholetail sale would have offered me most of the profit of the full rehab in a lot less time than the full rehab (1 month versus 3 ½ to 4 months) and for a lot less capital outlay (maybe $80K-$90K less). When there is a quicker exit that yields a good profit I will often take it. After all, if there is someone who wants to pay me now there is no longer any risk in that deal. If I must put more time and money into the deal there is always a risk that I may have miscalculated the next sale price. Heck, even if I was right on the sale price when I estimated it, the market can change in three months. I am in Michigan. A three month time period means a different season up here. The dynamics of a late winter sale versus an autumn sale can differ dramatically. I am sure those of you who see snow every year understand what I am saying.

     Well, the wholetail option no longer looks like a good one. I underestimated the ability of the odor of cat piss to permeate a house. I have a couple ozone machines running and the smell is lessened considerably—it is now only bad. We still have a lot of stuff to empty out of the house and I haven’t pulled the carpets yet. I am confident that will decrease the odor a lot but I no longer think it will be enough to be able to attract an owner occupant off the MLS. Most real estate salespeople do not have the experience to show their clients the value in a house that smells of cat piss. (I am licensed myself, though I don’t always admit it. I know good real estate salespeople. Some of my best friends are real estate salespeople. I am not criticizing all real estate salespeople.) I have no doubt we will be able to completely remove the odor but I think that will require us to seal all the walls with Kilz and to seal the floors by refinishing them and coating them with polyurethane. It doesn’t make sense to do that before we demo much of the house. Bye-bye option two.

     The plan is now to offer this house at wholesale for one week at a price that will allow another rehabber to make a good profit themselves. It will not be placed on the MLS. I will simply have a wholesaler blast it out to his investor list. Why? Simply because I have a lot of projects on my plate right now and this one will require the most work and funds. It is the best one to peel off. (Believe me, I am not complaining. Being busy is, by far, my favorite problem.) Why only one week? The weather again. The roof does not need to be replaced but it is not new. If I do a full rehab on this house in this neighborhood I will probably replace the roof (maybe just the part over the garage which is most visible) for aesthetics. It is much easier to replace a roof that doesn’t have snow on it. From mid-November on—snow can come at any time. If we go forward with the full rehab this project will probably wind up around mid-February. If this winter is similar to the fifty or so previous winters I have experienced it will be cold in February. Best to do the roof now.

     If there is interest and you let me know there may be another episode of this story. Wholesale flip or rehab? Stay tuned and thanks for checking in.

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