Flipping Full-Time in NJ: #6 Complete
It feels like forever ago now, but back sometime in mid-2018, I put an offer in on my first short sale. A little over 5 months later, that offer was accepted and closed, making it our 6th flip and 3rd for the year. While everyone jokingly kept telling us that “we had our work cut out for us,” I was confident in our ability to turn this from a diamond in the rough into a beautiful home. We knew at the time that the budget was tight so we were going to need to put in some sweat equity ourselves…lots of it.
We closed on the house in late August of 2018 for $119,500. We spent approximately $4,000 in closing costs which was about 20% more than we usually pay but most of that can be attributed to additional settlement charges because of the short sale aspect. It was purchased using a 60-40 split between our equity line and private investor capital, respectively.
The demolition work was out of this world. Almost every square inch of interior wall space was covered by ¾” thick cedar paneling, fastened to every stud with (3) 10-penny nails. It was next to impossible to remove and once it was, the underlying sheetrock was basically destroyed. Also, every door frame was steel and the cabinets were made custom out of ¾” plywood that was glued and screwed together. Put it this way, if a category 5 hurricane somehow struck the surrounding area, it would be the only house left standing. To top it off, it occupied a lot just short of a full acre that was so overgrown, you couldn’t even see it from the street.
Once we had a blank slate, the renovation proceeded relatively smoothly. All in all, we put in a little over $40,000 in repairs. This included a new roof, windows, siding, refinishing floors, installing carpet, framing out a new bedroom (2 bedroom to 3 bedroom conversion), new cabinets, countertops, converting from well water to city water, new furnace and AC, and many other improvements. It was by far our largest transformation to date.
We listed the weekend after Thanksgiving which I still believe diverted some of the interest of our typical buyers but in any event, we were able to secure a buyer’s contract within 2 weeks of listing it. We had originally listed it for $219,000 but after some negotiation, we settled on a final price of $214,000. There were some minor closing requests but we handled them the right way this time, providing a credit for some items and hiring out any other agreed upon repairs to professionals (see my previous blog post for what not to do). Although we were talked down $4,000 from our asking price, this was still a score in my book as I only thought we were going to be able to list it for $210,000. This valuation changed after I realized the potential for a 3rd bedroom.
Was it a tough renovation? Yes, it was. Are we super proud of what we accomplished? Absolutely. Not to mention the praise we received from the adjacent neighbors. With this flip, we proved to ourselves that there is truly nothing we can’t handle. As long as we did our homework beforehand.
Check out the pictures for some before and after shots.