HOARDER house made me $37,000! Other Investors passed!? Seattle

Real Estate Success Stories 87 Replies

Hey Bigger Pockets!

Once Again, im not being the best at posting, but I promise ill get better once I have some more time! Too many houses.  BUT, I wanted to at least post one that maybe others can learn from.  This house was a standard flip for us, but what made it interesting to me was how many other investors passed on it, and I could not understand why.  Whenever this happens, it makes me very cautious to buy, but I did it any ways.  Below are some pics and all the details of the deal, learn from my mistakes and successes!

The Property Details:

When purchased, this house was a 3/2 1600 sqft house, after rehab we were able to add 130sqft by finishing the utility area as well, making the house 1730 sqft.

This was by far NOT the worst hoarder house I have done, this was surprising full of stuff, but it was not full of CRAP, like many hoarder houses are known to be full of.  I found brand new freezers, and never been opened before elliptical, yard tools, expensive camping gear un opened, and the list goes on.  So this has been my favorite hoarder house as far as stuff left behind goes. 

Why didn't the other investors buy this house??

This house was sent to me by a newer wholesaler in the area of Seattle (this house is in Renton).  Newer wholesalers are not the best at marketing and not the best at analyzing the value of a property.  SO when the wholesaler sent the property out, he had bad comps and low values.  Many investors just glance on wholesaler emails (believe it or not, we don't always read your email blast of a property...you need to actually call some of us if you want us to look at your badly put together marketing email for a local property).  On this deal, I decided to actually take a look, and RUN MY OWN numbers.  I know the area, and saw that the resale that we quoted, 315k, was actually more like 330k if the house was rehabbed correctly.  SO I bought it when many others did not and they all passed, I was the last investor he sent it to before his contract expired.

REHAB:

We had to gut most everything, but this was pretty much a standard cosmetic flip in the area. 

  • Paint Int/ext
  • Major demo/trash
  • Update both baths, including cutting into slab in basement in order to set the tub to floor level
  • Cut in a sliding door in basement great room
  • New kitchen, knock down wall to open up
  • Lighting
  • new Flooring: laminate planks, vinyl, tile baths, carpet, etc
  • Major landscaping in the back yard: we had no idea there was a 30x20 foot cement patio back there, I didn't include the pics, but it was so over grown with stuff, we never saw it when we bought it.
  • All other basic cosmetic stuff that you do to make a new house: door, trim, etc.

TOTAL REHAB Costs: Roughly $46,000

The unfortunate and fortunate part of this project was that I didn't have any freed up contractors to work on the project when I purchased it.  I had too many jobs going on, and Washington, Specifically Seattle and King county, is hard to find good GC's with the right pricing.  So I sat on this house for almost 30 days with only getting Demo/trash done.

The fortunate part about this, was I was marketing for new GC's at the time since our volume demanded it, and I found a great group that just fired the local hedge fund here since they were paying them less and less.  Once I finished negotiations with the new GC, he literally had all his crews (16 guys) on this one house!  And in less than 3 weeks the project was done!  I now have a new relationship to add to my approved contractors list, and since then this GC has done 4 other houses for me.

The Numbers:

Purchase: $211,000 (cash)

Rehab: $46,000

WA Excise tax (1.78%) and sellers closing: $9990

Agent commissions on resale: $16,650

Sellers concession to new buyer: $7,000

Staging fee: $1500

SALES PRICE: $333,000

Total Net Profit: $36,911

NET Project ROI: 14.1%

Not too bad of a deal for a simple cosmetic house.


Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE | Podcast Guest on Show #189

Congratulations.  It looks like it was staged very nicely too.

Nice find. My father bought a hoarder house years ago at auction that no one else wanted to touch. The gentleman who had owned it prior collected everything and the yard was full, including more than 70 lawnmowers, over 120 bicycles (not kidding), and an interior that was almost as bad. He had worked at the town transfer station his whole life and brought home anything and everything he apparently thought had value. Took a skidsteer and 7 fills of a 40 yard construction container to clean it up. Once empty it was in decent condition and needed relatively little in rehab. Flipped it, and it got foreclosed on about a decade later, in much diminished condition. I picked it back up as an REO off the MLS in 2012, rehabbed it again, and now own it as a rental. It gets my attention when I see a house full of abandoned belongings. People can't seem to see though the mess, so I'm likely to pick it up for significantly less than otherwise, and emptying out costs relatively little.

Nice job and a good lesson that sometimes we have to look a little deeper and closer.

Medium bayou city multifamilyMichael Le, Bayou City Multifamily

Good job Tarl. Congratulations! 

Originally posted by @Tarl Yarber :

Hey Bigger Pockets!

Once Again, im not being the best at posting, but I promise ill get better once I have some more time! Too many houses.  BUT, I wanted to at least post one that maybe others can learn from.  This house was a standard flip for us, but what made it interesting to me was how many other investors passed on it, and I could not understand why.  Whenever this happens, it makes me very cautious to buy, but I did it any ways.  Below are some pics and all the details of the deal, learn from my mistakes and successes!

The Property Details:

When purchased, this house was a 3/2 1600 sqft house, after rehab we were able to add 130sqft by finishing the utility area as well, making the house 1730 sqft.

This was by far NOT the worst hoarder house I have done, this was surprising full of stuff, but it was not full of CRAP, like many hoarder houses are known to be full of.  I found brand new freezers, and never been opened before elliptical, yard tools, expensive camping gear un opened, and the list goes on.  So this has been my favorite hoarder house as far as stuff left behind goes. 

Why didn't the other investors buy this house??

This house was sent to me by a newer wholesaler in the area of Seattle (this house is in Renton).  Newer wholesalers are not the best at marketing and not the best at analyzing the value of a property.  SO when the wholesaler sent the property out, he had bad comps and low values.  Many investors just glance on wholesaler emails (believe it or not, we don't always read your email blast of a property...you need to actually call some of us if you want us to look at your badly put together marketing email for a local property).  On this deal, I decided to actually take a look, and RUN MY OWN numbers.  I know the area, and saw that the resale that we quoted, 315k, was actually more like 330k if the house was rehabbed correctly.  SO I bought it when many others did not and they all passed, I was the last investor he sent it to before his contract expired.

REHAB:

We had to gut most everything, but this was pretty much a standard cosmetic flip in the area. 

  • Paint Int/ext
  • Major demo/trash
  • Update both baths, including cutting into slab in basement in order to set the tub to floor level
  • Cut in a sliding door in basement great room
  • New kitchen, knock down wall to open up
  • Lighting
  • new Flooring: laminate planks, vinyl, tile baths, carpet, etc
  • Major landscaping in the back yard: we had no idea there was a 30x20 foot cement patio back there, I didn't include the pics, but it was so over grown with stuff, we never saw it when we bought it.
  • All other basic cosmetic stuff that you do to make a new house: door, trim, etc.

TOTAL REHAB Costs: Roughly $46,000

The unfortunate and fortunate part of this project was that I didn't have any freed up contractors to work on the project when I purchased it.  I had too many jobs going on, and Washington, Specifically Seattle and King county, is hard to find good GC's with the right pricing.  So I sat on this house for almost 30 days with only getting Demo/trash done.

The fortunate part about this, was I was marketing for new GC's at the time since our volume demanded it, and I found a great group that just fired the local hedge fund here since they were paying them less and less.  Once I finished negotiations with the new GC, he literally had all his crews (16 guys) on this one house!  And in less than 3 weeks the project was done!  I now have a new relationship to add to my approved contractors list, and since then this GC has done 4 other houses for me.

The Numbers:

Purchase: $211,000 (cash)

Rehab: $46,000

WA Excise tax (1.78%) and sellers closing: $9990

Agent commissions on resale: $16,650

Sellers concession to new buyer: $7,000

Staging fee: $1500

SALES PRICE: $333,000

Total Net Profit: $36,911

NET Project ROI: 14.1%

Not too bad of a deal for a simple cosmetic house.


Nice! Thank you for sharing it with us!

Thanks for sharing @Tarl Yarber !

Did you use a GC for the initial rehab eval? Do you use a dedicated team member for staging?

Originally posted by @Seth Carlone-Hanson :

Thanks for sharing @Tarl Yarber!

Did you use a GC for the initial rehab eval? Do you use a dedicated team member for staging?

Good Questions Seth.  I use to use GC's for the initial quotes long ago, but we have been doing this long enough in this area that we don't bother with GC bids anymore.  We have our team of contractors and we know their pricing, or they know we will only pay a certain price, and they do it because we have the volume and they know we will pay immediately upon completion plus draws.  As far as staging, I have a lady here in the area I like to use a lot, she does good work and a fair price.

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE | Podcast Guest on Show #189

Nice done @Tarl Yarber ! The results are really great for 46k for a 1,700 sf house. That's less than $30/sf. Is this the typical number you see with your gut out rehabs?

@Tarl Yarber Nice work...and I agree most Wholesalers are not good at it because mainly they have never flipped a property. It takes time  and education flip a property themselves to really understand the work from cradle to grave. Analyze repairs and get the best comps, as if they were going to flip the property.

Believe me I'm talking from experience.... 

Anyway enough about that... celebrate and move on to the next ...rinse and repeat!

@Tarl Yarber  Very nice!   Great job on seeing the hidden gem underneath all the debri. 

Congrats on the success you've had with this one Tarl! Are you sticking with Tacoma for your flips or are you looking to make your way to Seattle?

I have buyers for SFR. I'm interested in large off market commercial, hotel, multi-family unit portfolios. My main investors are only interested in the Seattle area. Either way I'm interested in working with whoever has the deal. There's enough money for everybody!!

The hungrier I am the less I sleep

@Tarl Yarber , the reno looks great! Question, did you furnish the house just for the pictures, or sell it furnished with those furnishings?

Congratulations!

I saw one of your other flips you posted. You, obviously, know what you are doing!

Much success to you!

@Tarl Yarber Another job well done! Kudos to you, and I agree with the others that the staging is great! Hopefully we'll be able to work together one day... =)

Awesome Tarl, thank you for sharing and being transparent about the numbers. There's alot to take away from this deal.

Cheers

Originally posted by @Troy W. :

@Tarl Yarber Nice work...and I agree most Wholesalers are not good at it because mainly they have never flipped a property. It takes time  and education flip a property themselves to really understand the work from cradle to grave. Analyze repairs and get the best comps, as if they were going to flip the property.

Believe me I'm talking from experience.... 

Anyway enough about that... celebrate and move on to the next ...rinse and repeat!

Thanks Troy!  And I could not agree more with your statement.  I started as a wholesaler, and didn't know much about how to analyze a property, but I eventually figured it out the more I worked at it.  On to the next!

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE | Podcast Guest on Show #189

Originally posted by @Alex Chin :

Congrats on the success you've had with this one Tarl! Are you sticking with Tacoma for your flips or are you looking to make your way to Seattle?

Thanks Alex! And I invest in a lot more places then Tacoma, im just more known for that in our group because no one else in the group does :)  I have houses in Seattle now and always look for houses inside Seattle, I just don't post them for some reason!

Medium img 9117Tarl Yarber, Fixated Real Estate LLC | http://www.facebook.com/fixatedRE | Podcast Guest on Show #189

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

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.

Lock We hate spam just as much as you