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!
Nice! Thanks for sharing.
Nice! I've had a few where some of my money lenders passed up and I took it on myself and made a killing.
What city was this in?
congrats. I hate crawl spaces. Noone wants to rent them.
did you buy this off MLS? Thanks for sharing. Love it. Big congrats to you!
That is a great little house. Great job on the rehab. I really like the stair well and the back yard looks like a really nice space. I would have had to add an outdoor living area coming off that back door. Was that something you considered? Obviously you got the price you wanted, so you made the right choice.
Great story, thanks for sharing!
Thank you for sharing, congrats. House looks great!
Love the before and after. Thank you for sharing!
Nice work on the beam, sounds like you have a good experienced carpenter, familiar with loads. The house especially the floors look awesome. Just wondering what did you do with the water heater in the 1/2 bath? ... good idea to move it.
nice work... nice tidy profit
most all our houses here have crawl spaces other than real older ones with basements. in the inner city.. anything basically 50's and older is crawl.. no slabs
we have them here too, but renters seek out basements. they are colder, moldier, sink, crack flooring, and nowhere to hide the Laundry and water heater.
I know why they built them 50+ yrs ago and thank God they stopped.
Having the right people on your team can, truly, make a big difference!
@Tarl Yarber :
Congrats! This is a perfect example of "profit from problems." It is inspirational to see someone tackle a property like this. I hope the new owners have a great time with it!
Congratulations! It turned out great!
Very nice, thanks for sharing.
What a great flip story! Thanks for showing your numbers on the house. I don't know why but a lot of investors are afraid to post the kind of information that you did. I really appreciate that. Sorry that I haven't seen you at the REIA meetings. I've been up to a lot myself. I'll need to post it on bigger pockets of what I went through to get my first deal. Pretty darn crazy. Let's keep in touch.
By the way, I saw that house on the MLS. I used it in one of the comps I was writing up for a property. Small world but then again we work in the same area.
@Tarl Yarber Great pics, great flip, great work! I appreciate you sharing the amount of detail that you did. Incredibly valuable stuff.
Best of luck in your future investments!
@Tarl Yarber Nice job!! There is nothing better than getting a deal on something no one else wants and making good money on it! Nice before and after picks. I bought a 3100 + sq. ft. Victorian last year that was built on a mountain side. It was a cut and fill slab foundation with insufficient compaction. The slab fractured and one corner had settled almost two inches below grade. No one wanted this house that was listed on the MLS, which positioned me as the only buyer in a fairly hot market. The slab fix cost a little over $14,000 and the rest of the house was already in great shape. I put in paint and carpet and sold my $99,000 initial investment for $250,000 and pocketed $100,000. I'm working on a home with a crawl space now that had slanted floors that I have high hopes for.
Nice breakdown of the flip. Well done. Every flip has a story and I like how you were able to do something with a property no one wanted.
what a transformation!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.