Hey Bigger Pockets!
Its getting busy here in Seattle for me and I would like to post more than I do. In the mean time, I thought I'd write up this property that we just sold because of the challenges involved and describe the missed opportunities of others, my hopes are for you to learn more so that you can seize a great deal that everyone else is passing on and have the confidence to act on it.
1908 year built, 3/1.5 1373 sqft home. After rehab 3/1.75 (made half bath into .75 bath).
(We had a heat wave here at this time...poor plants died...but it still SOLD in 2 days!)
I purchased this property March 27th 2015 and officially closed Escrow for the resale just now. SO approximate acquisition to disposition was about 130 days, give or take, not too bad considering the initial issues involved.
This house was brought to me via the MLS of all places, been on market for a while, no one wanted it, REASON? The House was SLANTED throughout and most people thought the price would cost too much to fix in order to make a profit. Depending on where you are from, you may have a slab foundation or you may have a stem wall on the perimeter for the house with beams and posts running throughout the center holding up the house (creating a crawl space).
This house had only ONE (1) Beam running down the center of the house, and it was beginning to look like a U as well. Consider the problems there. You cannot tell by the pics at all, but that house was sinking between 2inces to 5 inches in the center and throughout prior to us working on it.
Believe it or not, MOST investors wont go into a crawl space to check out whats in there. I am 50/50 on that...well more like 20/80. Ill always stick my head in, but almost never crawl around (that's what other people are for). HOWEVER, this house was pretty easy to see the problems in if you crawled in about 3 feet, I did this, and with the help of my carpenter, we figured out that the solution would set us back about $3500. DONE!
We kept the old beam in place, replaced all the pier blocks and supported all the posts, jacked the center of the house up with multiple 3ton jacks, ADDED a brand new 2nd beam to help support the span of the Joists, AND get this, had to strap down one side of the old U beam and crank it down to help keep it from staying a U shape. Finished!
What most saw as a serious problem had a pretty simple solution if you have the right team and people in place. Keep in mind, I do ZERO of the hands on work for all my properties, I network with GOOD honest people who give fair prices and when I find the right people I keep them BUSY and loyal and I PAY ON TIME ALL THE TIME.
Purchase: $158,000 (CASH)
Rehab: $52,000 ish (planned on 47,000 but added more to finishes later and had some electrical we were not planning on, welcome to rehabs)
Closing/holding/listing fees/misc: $29,000
Concessions to new buyer: $5000
SOLD: $280,000 (when purchased we planned on $260,000. Stay conservative)
SOLD IN 2 DAYS!! Their original offer was $270k, and they asked for us to cancel the open house we had planned, we countered at 275k and would cancel open house, they agreed if we gave 5k in concessions and increased sale to $280k. SOLD! Appraisal was a worry of mine, but no issue there surprisingly.
TOTAL PROFIT 130 days: $41,958
Remember to do your research on properties fast and effectively, know your stuff OR do what I do, make strong relationships with people who know their stuff. A while back I use to stay away from all slanted and sloped houses here in WA (there are a lot of 100plus year old homes here), but then I started asking more questions on how to fix them, met the right people, and now I have complete confidence on what these things take. Hope this information helps you in your business!