What’s up BP! My team recently started a flip in the historical district of downtown Tucson for an out of state investment group. I am going to do periodic status updates on this project and would love to hear from you. Leave a comment with your questions or thoughts. I am passionate about helping others learn how to build wealth through real estate, let me know if there is anything I can do to help you on your real estate journey. Now on to the project!
This was an off-market property that a birddog on my team identified as distressed. Within a week of making contact with the owner we were under contract. We then assigned the property to an out of state investment group that we have a close relationship with (If interested I can go into more detail on how our system of tracking off market deals works but we basically have guys driving for dollars and identify distressed properties. From there the addresses are added into a CRM program and our caller reaches out to the owner via telephone, Facebook messenger, or mailers. We have teams driving for dollars every day in Tucson and Kansas City.)
Once under contract our construction arm put together a comprehensive estimate for the remodel and our investment team began running a financial analysis and a market CMA. The numbers presented below are conservative and the net to the investment group after the wholesaling fee, project management fee and real estate closing costs. We believe the projections to be conservative and on the low end of what is possible on this project.
One challenge on this deal is that the property is located in an area overseen by the Tucson historical society (THS). This historical committee must approve the key component of the remodel. As a result we increased our remodel budget and timeline to account for possible unknowns. We have experience with the THS, most recently on a 5-Plex that we are renovating a block away from this property. (Word of advice for anyone doing a project in a historic area, make sure you consult with experts who understand what is necessary and possible with the historic committee. On our first project we had multiple road blocks that costs of upwards of $10,000.)
1. Currently a 2 bed 2 bath house
2. Remodeled into a 3 beds 3 bath house
3. The previous owner started work but was unable to complete4.
4. Demo phase has been completed
5. Once completed the home will be 1,401 SQFt
If you have questions on the financials or would like more detail please leave a comment below. Happy to discuss in more detail.
Please let me know your thoughts on this one. Leave a comment below and stay engaged as we move forward with this renovation.
Very nice!!!! & best of luck.
Those are really tight numbers. Without your experience it would not be worth the risk.
My advice to any one thinking of flipping in a historical district is to not do it.
Thank you for your comments.
@Thomas S. : They are tight numbers, but also conservative. Working in a historical district can be challenging, but very rewarding.
What are some of the big roadblocks you run into when doing a project in a historic area? Where can I go to learn more? I'm excited for the next update!
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.