Successful Flip Details w/Photos and Numbers ($95k reno)
Hello BP World!
I've recently completed my biggest project yet which included a renovation cost of approximately $95,000, multiple offers, a quick sale to a military couple, and a happy closing! :)
Buying the property:
This deal was brought to me by someone who I've previously bought a property from through a wholesale deal. In this previous deal, this particular person was the seller of the property in the wholesale deal, not the wholesaler. This seller buys properties at auction and sells them after taking ownership. On the previous deal, the wholesaler was planning to flip the property but their funding fell through so they wholesaled it to me, and i was fortunate enough to meet the seller at closing and strike up conversation and exchange information. (Network, network, network!) Anyway, the seller brought me this deal at an asking price of $85,000 and we agreed on $75,000. I funded the property with a commercial construction loan thru a local community bank, where the bank funds 75% of the purchase price and 100% of the renovation. (I will spell out all the numbers later.)
Pre-purchase:
When i first saw the home, it was packed with trash, clothes, furniture, etc. You could barely walk in certain rooms of the home. However, the home had a great layout and great spaces. I think it is important to have a vision for these types of things and when the house is in shambles, you have to be able to see past the piles of clothes, broken windows, and less than appetizing smell. If you develop this vision you can truly recognize the value of a property and the potential for what it can be, which can really set you apart from other investors. The seller and i agreed that they would have the property completely cleaned out of all these items before closing (about two 30 yard dumpsters worth). I think the seller had put all the items at the street incrementally and the local township picked it up, i didn't care as long as it was all gone! Smart move on their part.
Specs:
Cape Cod style home on a cul-de-sac with 1 car garage, walk out finished basement, and two story deck.
Square footage: 1878
4 Bedroom, 2.5 baths
Renovations:
Below is a list of renovations post-demo in no particular order.
1. Reconfigure kitchen layout entirely (except sink which stayed under the window overlooking the back yard - important feature!). Removal of non-load bearing wall to open up to dining area. Remodel kitchen completely w/breakfast bar, white pearl cabinets, rubbed bronze hardware, granite, stainless steel appliances, recessed and pendant lights.
2. Gut and remodel 2.5 bathrooms. In both full bathrooms, i used the same cabinets and counters as the kitchen.
3. Replace sheetrock in finished basement. Add recessed lights in basement
4. Convert entire house to natural gas appliances (cooking, dryer), water heater, and furnace. Local utility company ran a gas line and meter (FREE of charge). Plumber installed gas piping throughout the house (NOT FREE of charge). UNDERGROUND Oil tank was removed, that was a risk. However, the seller agreed to perform a soil contamination test before closing, which came back clean. Clean soil test does not always guarantee that the tank did not leak, so it was definitely a risk and an unknown until the tank was dug up.
5. Replace all interior doors and hardware w/ 6 panel vinyl doors and rubbed bronze hardware.
6. Replace all windows and exterior doors w/ metal capping, etc.
7. Install wainscoting in foyer, family room, and dining area.
8 All new gutters, downspouts and metal capping on fascia, soffits, and rake boards.
9. Replace concrete driveway, front steps, and walkway.
10. Install new guardrails onto exist deck and paint to freshen up.
11. Install interior access to garage. No-one wants to park in the garage and carry groceries out of the garage through the front door into the house. Buyer probably had no clue that it didn't previously exist, however, big selling feature.
12. Landscape and staging. I cannot stress the importance of these two steps, which i notice that a lot of flippers ignore. My reasoning - first impression is key. There is no better first impression then when a potential buyer pulls up to a neatly landscaped and clean cut yard and is wowed from the jump. Staging of the interior (at least stage kitchen and bathrooms) makes the buyer feel "at home" and helps them picture themselves living there and putting their own interior design touches on it. The immediately become emotionally attached.
13. Brand new heater, ac unit, and water heater.
14. Roof had previously been replaced w/architecture shingles and only needed minor repairs.
15. All new flooring throughout. Ceramic tile which continuously flowed through the foyer, kitchen, hallway, and bathroom on the first floor. Carpeting in bedrooms and basement. Engineered 12mm laminate in family room and dining area.
That list was all over the place, i apologize.
The Numbers:
Purchase price: $75,000
Renovations + holding + closing costs (buy and sell): $120,335
List price: $214,900
Sale price: $231,900 - seller requested $10k concession to cover closing costs and VA loan costs. (Did not expect it to appraise, but it did.)
Net sale price: $221,900
Number of days closing to closing: 210
Net Profit before taxes :( : $26,565
Approximate number of hours spent on this project: 35
$/hour on this project: $759
Selling:
The home attracted multiple offers and went under contract within 6 days. Best and highest came back $7,000 over asking, with $10,000 seller concession. The buyers happened to be a military couple who were stationed overseas for the previous 11 years and were moving back to the US. The buyers FaceTimed from Germany with their relator and submitted their offer without physically visiting the property. I thought this was awesome!
Photos:
Before of front After of front
Before of rear After of rear
Before dining / kitchen After dining / kitchen
Below are bunch more after pics.
Hit me up with some questions and feedback!!!
Thanks for reading!
Justin