Another Will Barnard Success Story

12 Replies

Hello BP Nation. You may or may not  have noticed my activity level here on BP has been brief over the past 4 months or so as I have been extremely busy in the field with many development projects. A most recent one just completed, listed for sale, and in escrow set to close soon would be a great opportunity for me to share with you all what I have been doing over the last year.

As I have stated many times in the past, savvy investors must change how (and possibly where) they do business as the market conditions change. Adjusting to these market changes allows you to utilize the best money making strategy at that time while mitigating as much risk as possible.

With that said, my strategy has been to buy small, older, and dated homes in areas that have sold comps selling for at least $500 per SF. After closing on them, the idea is to demolish most of the existing and build the property out to maximize the returns. By adding square footage to the property, I am literally "creating my spread" as my cost to build is well under what I can buy/build.

So without further ado, here is the latest one:

Purchased for $700,000 / $250,000 Construction Costs / List Price $1,269,000 / Sold Price $1,335,000. So if you add the purchase price to the construction costs, you get $950k and then divide by the sold price and you get a deal at 71%. Now you all know the 70% rule and I must say that it is almost impossible to get to that number in my market here in So Cal but in this case, I was able to get to that number, not at purchase but after coming up with the best build out plan and getting the highest sold price. So this one turned out to be a home run. Most of the deals I am doing in this format are the typical 77% to 80% deals, however, in each of them, the total profit is always over $100k making for a nice profit no matter how you slice the percentages.

On top of that, this deal was funded by my private investors via debt financing and they made a 10% return on the $850k invested.

Before Photos:

After Photos:

Originally posted by @Deborah Burian :

Welcome back and congratulations on a great deal. Next thing we know you'll have a TV show!

 Thanks, but not likely. Been offered that several times and only once did I explore it some, but I just don't have the time or the desire. I prefer to just share with my friends here on BP.

Nice work!  Not a fan of white (personal preference) but you did pull of the modern look well with the white throughout the house. 

Originally posted by @Jim Adrian :

Nice work!  Not a fan of white (personal preference) but you did pull of the modern look well with the white throughout the house. 

 I was not a fan of the all white previously either, however, what we builders like has little to do with it as the important factor is what the general populous of buyers want/like. I am now getting use to it more and the colors added with the staging really sets it off.

Originally posted by @Anthony Gayden :

Will Barnard

What city is this home located? This is quite an interesting addition. How old was the home and how much space did you add?

 Sherman Oaks, CA. it was around 1100 Sf and the finished product was 2020 SF plus a 430 SF attached garage. It was originally built in the early 1950's.

WOW!! Great job @Will Barnard . I know you really have to beat the bushes to find those kind of buys. As to the all white, it's funny, white is THE color for southern California. It looks modern, fresh, is popular, and it works! I think it's the coastal vibe. Congratulations! 

Originally posted by @Cedric B. :

@Will Barnard

Awsome

Can I ask you what was the average timeline of these projects? The problem I see in LA is the huge waste of time dealing with construction permits

 This particular project was 8 months. We are averaging about 9-10 months per deal similar to this. Thanks for your question.

Will, where can we see details of your projects that were failures?  Everyone has to have at least onethey're not so proud of, right?  I know I've got one or two

I have documented several failures on BP. If you go to my profile and look through some of the deals I have posted, you will see it. It is labeled 

Fix & Flip | Nov 2014 - Oct 2016

  • Single-family residence in Beverly Hills, CA Purchase price: $1,890,000.00 Cash invested: $450,000.00 Sale price: $2,575,000.00


  • That was my biggest failure where I lost about $250k! Ouch. I did not go very far over budget but the time on market was an added year (picked the wrong agent!) and the sales price was over $300k under projections which both combined for the loss.

    I have also documented other losses in my posts here on BP. Anyone who says they have never had a loss is either lying, has not invested long enough, or has not had enough deals.

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