Victorian rehab gone wrong
Investment Info:
Single-family residence fix & flip investment.
Purchase price: $278,000
Cash invested: $389,000
Sale price: $775,000
Restoration of a 1895 Victorian home. Restored original wood trim and floors. Added a basement
What made you interested in investing in this type of deal?
I had never done a restoration project and I was interested in trying something new.
How did you find this deal and how did you negotiate it?
My realtor found it for me and I increased the offer by 20k to get it accepted before the open house.
How did you finance this deal?
I used hard money for the purchase and private money for the rehab.
How did you add value to the deal?
Completely restored property that had been recently moved to a new location and placed on a basement foundation. Added all major systems in the house, added stairs to basement all while trying to keep as much of the original house as possible. Added a master bathroom and a detached garage. We originally listed for $889,00 and eventually sold for $775,000 after 5 months on the market. I rather stick to me much lower priced rehabs
What was the outcome?
I was able to pay all my investors off but lost money myself
Lessons learned? Challenges?
I was not prepared for this rehab. I way under estimated the rehab cost and time frame to get done so my holding costs were high. I had to fire a contractor halfway through the rehab and than we discovered he did about 20k in damage to the house that I had to fix. Since I went over my rehab budget I had to fund the rest of the rehab for profits from my other rehabbed properties which in turn took me much longer to get done.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Karla Garner - Realtor
