Hendersonville, NC - SFR - Jay C

18 Replies

OK BP - it's about time I did this.  I'm in the middle of my first rehab that doesn't involve me living in it...unless I'm at the house working after 10pm.

I've completed and documented some vintage motorcycle builds on other sites in the same way that this is going down.  Documenting progress online adds motivation, honesty, accountability, and most importantly...vulnerability.  It is necessary to be honest with yourself and the online community to make progress, share lessons learned, and move forward together.  So here is my first flip (non-hobby flip) in the raw.

I had completed a live in flip in central NY when I was living there - it was a hobby.  After spending all day chained to a desk in the corporate world, I felt the need to medicate myself after hours with hands-on, value added activities.  So I gave my old place the best of the best, created and installed all myself with no cognizance of cost, and off we went.  

This time is different. I picked up this 2/1 SFR built in 1950 in Hendersonville, NC from a wholesaler that I had developed a relationship with.

Initial Numbers:

Price: $67k - $27k out of pocket with a seller note carry for $40k/balloon payment at 0% for 12 months

Rehab Cost Estimate - $13k

Rehab Items - New roof, landscaping, fix deck, flooring, paint, bedroom carpet, update fixutres, update kitchen/bath.  Some things to note- the plumbing and electric have all been update recently.  The wallpaper had not been updated.

Timeframe - Early November start to mid-January finiah.  I plan to do roughly 75-80% of the work myself.

Numbers - Purchase for $67k. Legal Fees for Purchase $1,300. Rehab $12.7k. ARV - Conservative $95k-100k. This won't be a homerun, but I knew that. Holding costs - $47/mo plus utilities.

Some things I learned in the first few weeks:

1. Get your rehab team together ASAP.  I run a landscape business full time and treated this flip as a hobby/project initially.  If you want to run 2 business, you better plan on not slacking off.

2. The day after closing is not the day to start making phone calls to roofers, contractors, inspectors, etc. See #1.

3. Get a home inspector there during the diligence period.  Just because you did a successful flip 800 miles away 5 years ago does not make you an expert in a new part of the country.

4. During the inspection process, don't walk around and say "$1500 for the kitchen, $300 in paint, $600 for the bathroom" - document everything that is going to be needed - Every fixture, switch, baseboard, shower curtain - Everything. Then price it out or estimate after the face.

5. Talk to neighbors/mailmen/etc. I was blown away with how nice and informative everyone was.  Visit at a few times during the day and drive the neighborhood.

6. A great opportunity for systems - having a VA take care of changing over gas/elec/propane/water/sewer/etc.

7. You cant have 2 full time jobs at once.  I'm lucky that my holding costs are so low.

From what I gather, there was a big step up in building/construction betweent he 50's and 60's.  This home built in 1950 had floor joists that skipped the planer that we take for granted today.  The floor here has girders placed every 10 feet, with what I believe to be oak 2x8 floor joists at 24".  Needless to say, each joist is cupped, with the floor sinking between each girder.  The good news is that the diagonal plank sub floor is doing a great job at hiding it.  The pine tongue and groove is tempting to replace, but so far gone and wavy that it's going to have to remain in the dark.  I don't think it can be saved.

Originally posted by @JD Martin :

Hville is a hot area - unless you're way out in the county I can't see you going wrong at those figures. 95-100 ARV sounds low to me on the surface.

 Thanks JD - I'm working in a neihborhood that was pretty ugly about 8 years ago - things are really coming around though and taking this area from a red zone to something that I'd consider orange/yellow.  2 new schools, walking distance to the YMCA, and a huge hospital expansion 2 blocks away make this area soon to be desirable.

Where the floor joist cupping was bad, we had to cut out the floor and plane down the floor joist high spots.  Nicole Curtis crapped her pants when she heard that we didn't try to save that old pine T&G.

Thank you very much for sharing. I am also in Hendersonville, NC.  Right now I'm just educating myself on the market - complete newbie.  From your description I can tell approximately where you're at.  I'll try and go see it! :)

Originally posted by @Daniel Walker :

Thank you very much for sharing. I am also in Hendersonville, NC.  Right now I'm just educating myself on the market - complete newbie.  From your description I can tell approximately where you're at.  I'll try and go see it! :)

 Hey Daniel,

Hit me up with a PM for the address. Swing by to check out the place and I'd be happy to share all the newbie lessons learned.

Jay

my younger brother is an electrician that lives in NY. I flew him down to spend some quality time busting *** on 15 hr days.  It's unbelievable what can be accomplished with multiple people that know what their doing.

Rather than quick fix the ugly wall, we tore it open to deal with it.  A 1950 6x4 had turned its shoulder a long time ago. Rather than fixing it , somewhere along the line someone triedh to hide it.   We shaved it down and hung someecard fresh drywall. Flat walls in the LR and some fresh paint make all the trim carpentry look great.

I had a huge lesson learned this week that I'm proud to share. 

The lesson of time leverage.  I always did everything myself because no one could work as hard as I could.....

So I brought in some competent friends this week. We did more in 7 days than I did in 7 weeks on this house. 

Surround yourself with good people. Let them do their best work. Stay out of their way. Their 100% is better than yours.

Everyone wins.

It's been a while since I updated this post, but a lot of progress has been made. I was able to get the bedrooms painted and carpeted, carpet and paint the sunroom, fix the wall in the living room, paint, and install laminate flooring, update the kitchen (countertops pending) and sign an offer on the house. Needless to say, it's been a big month. Here are some before and after (or before and current) pics of the updates that have been completed.

The existing deck railing was shotty.  Only 30" above the deck and completely warped by the sun.  Rather than give the next home inspector something to flag, I tore off the old railing and built another.

On this past Thursday evening, when most were at the grocery store stocking up for the upcoming blizzard, I was at Lowe's and Home Depot making sure I had enough building supplies to weather the storm.

I wanted to close the loop on this thread, but had been holding off because I didn't want to jinx myself.  I finished working on the house in early February, it's been under contract since then, and now I'm waiting on the bank and the buyers to get their Dodd-Frank crap together.  It's been frustrating to say the least.  The good news is that new owners are staying at the house and paying rent.

So I'll circle back and rerun the numbers:

Purchase Price: $67,000 (Previous owner carried a $40k note for 12 month at 0%)

Rehab Costs: $13,500 

Holding Costs: $1100

Closing Costs: $8800 (2 Closings + Realtor commission)

Purchase Price: $119,500

Estimated Expected Profit: $29,000

Out of Pocket CoC Return: 67%

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