Sold! House flip $83,000 in Profit

Sold! House flip $83,000 in Profit

Tarl YarberPro Member
Flipper/Rehabber · Seattle, WA · Member since 2014 · 415 posts · 401 votes

Hey Everyone! (all pics take before and after in same locations)

I wanted to share one of our recent success's with the BP community and hopefully help some of the newer rehabbers out there and give them some encouragement to keep going.

I bought this house in January earlier this year, its a Seattle based property on the south west side. This was by far the ugliest house in the neighborhood. We found the property via MLS as a Freddie mac home, after waiting for the first look to expire, we then had to battle with other investors to get the winning bid.

Our initial acceptance was at 175K, after inspection period we were able to re-negotiate surprisingly down to 165k. This usually doesn't happen here any more with banks since there is such competition here at this time (but we found extensive damage that was hidden such as the roof having three layers of roofing, the bottom which was cedar shake with ZERO sheeting at all).

Pre-purchase: 2bed/1bath 800 sqft finished living space with an unfinished 720sqft basement

After Rehab: 3bed/2bath 1520 sqft finished living space

Rehab consisted of: demo, re-wire entire house, move electrical panel and update, roof, siding, hardwoods installed, build new bath in basement, add master bedroom in basement, add washer dryer closet in basement, remove upstairs wall and add beams, remove addition in back and rebuild deck, fencing, landscaping, EVERYTHING, you get the idea.

This house did take a full month longer for rehab then anticipated, but it all worked out in the end.

The Bad: Budgeted 75k for rehab, ended up 88k, anticipated 60day rehab, took 90days, termites, no HVAC where we thought, Water heater was leased so it got removed after buying it (didn't know that), had to fire a contractor and have others fix his bad work, bath tubs were lain incorrectly and was not discovered until we were ready for tile...

The Good: House turned out WAY better than thought, the additional time for rehab gave time for neighborhood market to increase as well, low inventory at time of listing, sold in 4 days.

Numbers:  Purchase: $165k (CASH)

Rehab: $88k

Holding costs: roughly $2500

All selling/closing/realtor/staging/misc: $35k

Selling Price: $369,000 with no concessions

Net Profit roughly:  $82,556

28Reply
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Most Popular Reply

Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
11y

Way to go my friend! Awesome work. Thanks for sharing such a great and inspiring story.

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  • Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    11y

    Way to go my friend! Awesome work. Thanks for sharing such a great and inspiring story.

  • Linda WeygantPro Member
    Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
    11y

    Well done!

  • Real Estate Investor · New York City, NY · Member since 2015 · 73 posts · 41 votes
    11y

    Awesome work Tarl! Keep up the good work. 

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y

    kick ***! when are you starting on the next one?

  • Orlando, FL · Member since 2015 · 79 posts · 21 votes
    11y

    Wow. The house looks great. Kudos to your hard work.

    Congrats!

  • Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
    11y

    @Tarl Yarber

     Way to go! Do you mind sharing how much that addition was? Because you kept that rehab pretty low with a 700 sf addition. We are looking to do something similar but I am getting quoted at 120 a foot!!!

  • Investor · Salt Lake City, UT · Member since 2014 · 68 posts · 25 votes
    11y

    @Tarl Yarber

    Thanks for the update and pictures. Sounds like it was a lot of work, but definitely a good purchase by the sound of things. Congrats on your successful flip. Very inspiring!

  • Johnson City, TN · Member since 2014 · 140 posts · 133 votes
    11y

    congrats! Can you further explain how you financed the propert? I.e cash, loan etc

  • Investor · Fairfield-New Haven-Hartford County, CT · Member since 2013 · 825 posts · 413 votes
    11y

    Congrats! Way to hit it out of the park @Tarl Yarber!

  • Tarl YarberPro Member
    OP
    Flipper/Rehabber · Seattle, WA · Member since 2014 · 415 posts · 401 votes
    11y
    Originally posted by @Devan Mcclish:

    @Tarl Yarber

     Way to go! Do you mind sharing how much that addition was? Because you kept that rehab pretty low with a 700 sf addition. We are looking to do something similar but I am getting quoted at 120 a foot!!!

    Devan, we didn't do a 700sqft addition, we finished the 700sqft basement.  In Seattle there are a lot of basements that are not finished and are not counted as livable sqft.  Once you finish them, you can them count it as livable, its a great way to add equity here so long as you have the ceiling height needed.

  • Tarl YarberPro Member
    OP
    Flipper/Rehabber · Seattle, WA · Member since 2014 · 415 posts · 401 votes
    11y
    Originally posted by @George P.:

    kick ***! when are you starting on the next one?

    Hey George!  I have lots more going right now and more coming, ill start sharing more on BP now I think, good and bad ones :)

  • Tarl YarberPro Member
    OP
    Flipper/Rehabber · Seattle, WA · Member since 2014 · 415 posts · 401 votes
    11y
    Originally posted by @Skylar Dejesus:

    congrats! Can you further explain how you financed the propert? I.e cash, loan etc

    Hey Skylar.  Sure!  This one was purchased all cash.  I know that some newer people may say "what!?, I don't have that kind of cash and cannot come up with 165k for purchase and then another 88k for rehab."  Well over the years I have developed a fund where we pool individual investors who just want a return on their money, throughout the year we pay that return in their trust accounts after the projects are completed.  That's how we did this one. More of an advanced discussion that maybe one day i'll post about.  Allows for all cash and complete control, and then we pay 10-15% on an ANNUAL basis to the trust accounts, we typically make 20-25% per project, and we turn the money on average 3 times a year, so if you do the math at 25% per project at 100k each project costs, that's 25K net profit, x3 projects a year equals $75k.  However we only used the same 100k three times from that one trust account that we only pay say 15% annually that year based on performance, so that's 15k to the "investor" and 60K to us at the end of the year.  Hope that makes sense.

  • Johnson City, TN · Member since 2014 · 140 posts · 133 votes
    11y

    yes sir it does appreciate your response very informative. How long did it take you to set up that trust account. I would love to talk more about how you've structured the account! Thanks!

  • Grand Prairie, TX · Member since 2014 · 14 posts · 0 votes
    11y

    Wow! Awesome deal! Congrats!

  • Wholesaler · Dallas, TX · Member since 2015 · 13 posts · 5 votes
    11y

    Hello Tarl!

    Wow I absolutely loved hearing about your flip! I am very new to this but I've had a strong passion for real estate for 8 years now. Thanks for sharing the details about your flip I would love to connect with you and take notes!

  • Investor · Bethesda, MD · Member since 2012 · 80 posts · 3 votes
    11y

    Good accomplishment. keep it up. Do let us know about your next one. 

  • Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    11y

    Congrats @Tarl Yarber. 

  • Investor · Inverness, IL · Member since 2015 · 124 posts · 35 votes
    11y

    Very nicely done! Great job!

  • Investor · North Woodmere, NY · Member since 2014 · 97 posts · 7 votes
    11y

    Well done!!

  • VENICE, FL · Member since 2015 · 113 posts · 36 votes
    11y

    Holy Smokes!!!! Most Excellent Job my Friend!

  • Wolcott, CT · Member since 2013 · 139 posts · 49 votes
    11y

    @Tarl Yarber Way to go! Also, seems like you've got a great financing system too.

  • Realtor · NW Suburbs of Chicago, IL · Member since 2015 · 156 posts · 62 votes
    11y

    @Tarl Yarber

     Congratulations!  Always love the success stories! Thank you for sharing! :)

  • Investor · Scotch Plains, NJ · Member since 2014 · 105 posts · 50 votes
    11y

    @Tarl Yarber

    Nice job on the project, the returns, and the financing structure. Very impressive!

  • North West, PA · Member since 2015 · 35 posts · 8 votes
    11y

    Great job!  Thanks for sharing your project which can truely be an inspiration (and kick in the pants to get started) to others.

  • Wholesaler · Dallas, TX · Member since 2014 · 78 posts · 32 votes
    11y

    Very nice! Awesome Profit! Keep it up !

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