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Tarl Yarber
Pro Member
  • Flipper/Rehabber
  • Seattle, WA
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415
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Sold! $52,000 Profit Flip, despite challenges

Tarl Yarber
Pro Member
  • Flipper/Rehabber
  • Seattle, WA
Posted Jun 9 2015, 09:53

Hey everyone!

I wanted to post our latest sale that closed about 2 weeks ago here in Seattle (SeaTac). Despite having a business partnership issue on this property that delayed us listing the house for almost 30 days, we still came out well on this one. Below are the pics and details on the deal:

Property Details: Property is a 4 bed/1.75 bath 1660 sqft home built in 1961.  We found the property via a wholesaler who tied it up.  The house was vandalized throughout, copper was stolen, furnace destroyed, water damage in lower level, roof was leaking near front door, etc.

This house all in all was a simple house for a rehab for the most part.

Major issue: The biggest problem we faced was the crawl space was full of water.  This is typical in seattle, but you have to deal with it somehow.  You can add a sub-pump (which can be expensive).  However we got creative and fixed it old school.  We found where the water was coming in, then graded the dirt with new fill dirt, making channels as we went until we reached an old clay drain pipe we found buried.  From there we led the water out of the crawler, then we put a nice thick vapor barrier throughout the entire crawler and sealed it. Instead of a $2500 fix, it became a $500 fix for labor and dirt.

Rehab Scope: Roof, ext/int paint, kitchen, new flooring throughout, update both baths, new plumbing to replace missing copper, furnace, rear deck, doors/trim, etc.

UNFORESEEN Delay: On many of our deals we tend to partner with others, and those usually go smoothly.  However on this one we had an issue with our own internal partnership in our company.  One of our partners broke their agreements and led us to attorneys and such which created more drama then needed.  Since this property was ready to list when this was happening, we decided to hold off on listing until we removed the partner and technically had to change title.  The property sat finished for 30 days before we could list.  I am not sure if this helped with prices, but it worked out in the end.  Nothing more frustrating then sitting on a beautiful house with staging in it though...

The Numbers:

Purchase: $195,000 (cash)

Rehab: $50,200

Holding: $1539

Closing/sales/excise: $28,000 (roughly)

Sold in 6 days: $330,000 conventional, no concessions

Profit: $52,074 give or take.

Bottom line, is make sure that you have VERY well defined contracts when you set up your partnerships, whether its for your company or a joint venture on a property.  You never know what some people might do once money is involved.  This comes from many lessons over my lifetime so far, CLEARLY define what peoples roles are and what happens with the money once its in the business PRIOR to making the money.  This helps eliminate a lot of drama and weirdness later in the game should it come up.

Hope this helps!

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