Wholesaler · Kenvil, NJ · Member since 2015 · 42 posts · 15 votes
This flip is in northern NJ, middle class area in suburb, cape w/4 bdrms. and one bath.
Purchase price (short sale, buried oil tank) $112k
Rehab $50k (paint, refinish HW floors throughout, new fixtures and tile in existing bath, add bath {no tub, just shower} in bsmt., remodel kit, remove non-leaking oil tank and add CAC)
Listed for $274,900, sold in a week for $269,900 (still thinking we should have negotiated harder for full price)
It took WAY longer than it should have, almost a year from our offer to the bank until the close on the new buyer's transaction. This was mostly due to our money partner, who has other unrelated business interests that he periodically travels abroad to attend to, leaving the project frozen in place for his return. He is a real micromanager, insisting on the final ok even for smaller details like light fixtures and tile. Since his share is more than half he gets to call the shots. So carrying costs, etc. will be higher than they should be.
Thanks for sharing. So looking back on the whole scenario, what went right and what went wrong in your opinion and what might you possibly do differently in the future?
Sherri---As I mentioned in my post, there were some factors we just didn't have control over due to money partner owning more than 50%. B/C of that, project took about 3X as long as it should have, costing thousands more than it should have in carrying costs, interest, etc. If I had my druthers, wouldn't have him as partner. Also, he has a habit of telling subs that he doesn't care whether or not they pull permits! Naturally, after hearing that, they don't pull them (why would they incur more expense and necessitate their work passing pesky inspections if he tells them they don't have to?) Well, I do care. Even though we're not in a city (no C of H required on sales), it seems that the home inspectors and attys that our buyers hire tell them to check with the twp. that permits were pulled for the work. So far we've been lucky that the bldg. officials haven't fined us or made us tear out work, allowing us to pull permits after the fact. But I don't want to push things to the point where the bldg. dept. decides enough is enough. Alas, as of now this ( i.e., money partner and his foolishness) seems to be part of the price we pay for access to money.
Steve---Money partner's accountant hasn't done final accounting yet, and some of it depends on how much carrying costs, interest, RE commission, etc. add up to. I'm hoping around $70k profit will be after all that. Ironic that he can hit me with inflated costs for those items when he's at fault for pushing them up.
Congratulations on getting it sold quickly! I have a similar project Im working on in Sparta, NJ now. I had it under contract for 14 months before I closed in Mid January. Its a complete interior gut including insulation and sheetrock. I'm trying to get it done and ready to market by mid March.
Was this the first time you used this money partner? Maybe with the profits on this one you can use your own funds and hard $ for the next one. It might be cheaper and easier.