Purchase Date: 8/26
The Deal:
I can’t remember the exact price, but I am pretty sure that the wholesaler was originally looking for $99,000. After a month or so the wholesaler dropped the price by $40,000 and was now asking for $59,900, which I quickly put under contract. I know that this isn’t normally the kind of thing I do, but at this price, I couldn’t resist.
How Did We Find The Property?
We originally went out and took the photos of this property for a wholesaler, who then listed the property for sale on our Facebook Group. This is a wholesaler I had done business with in the past but never purchased from before.
How Did We Fund The Property?
We ended up using a hard money lender for the purchase. We were able to get 90% funding for the purchase price and 100% funding for the rehab. We did have to pay some pre-paid interest upfront at closing with our downpayment. With a purchase price of $60k we had to put $6,000 down, in addition, we paid an additional $13,000 in interest and points I believe. We asked the hard money lender for $65,000 in renovation money for the project. We eventually went over our budget and I had to put an additional $20,000 on credit cards, Lowe’s accounts, and my own cash to cover the difference in the budget and final rehab numbers.
Another way that I funded this deal was through a partnership. I partnered with my contractors on it, which reduced my labor costs to almost $0. Because of this, I didn’t have to pay labor, but I did have to split profits with my contractor. As a result, I probably received a very good labor price, but this deal could have been more profitable, and had I done so, they would have made significantly more.
How Did We Fix The Property?
Not only is the property the largest property we have ever purchased, at just over an acre, but this house is the largest house, with the highest ARV we have ever purchased. With a property like this, we had to fix just about everything. We spent the equivalent of weeks working on the landscaping. The neighbors had never seen the fence at the back of the property even though they had lived there for 10 years. The property took 3 40-yard dumpsters over the course of the project in demo, trash removal, and construction cleanup. We replaced windows, roof, some siding, doors, flooring, paint, and redesigned the master bedroom and bathroom layout, as well as the kitchen and porch area. We also added an upstairs bathroom, replaced the stairs, and much, much, more.
Before Video: Outside
Before Video: Inside
Midway Video Update:
Update List:
- We removed all the trash inside and outside of the house – three 40-yard dumpsters worth!
- We did a complete overhaul to the landscaping of the property
- We added a 3rd bedroom
- We added a full bath
- We added a coat closet in the entryway
- We installed all new lights throughout the house
- Removed all the old flooring & installed all new vinyl plank
- We installed a new toilet, exhaust fan, and vanity in the bathroom
- We cleaned, primed, and painted the entire interior of the house
- We installed all new cabinets, hardware & countertops
- All new Whirlpool stainless steel appliances
- We replaced all the outlets & covers, as well as the light switches & covers
- And much, much, more!
After Video – Outside
After Video – Inside
Sale Price
I distinctly remember listing this house for sale on a Friday evening in April 2023. We had multiple showing requests that evening and by Saturday morning we had an offer about $5,000 less than the full price, however, our price was much higher than we initially thought it would be. When we bought the property we thought the ARV was in the $225,000 range. As we got excited about the deal and thinking about our plans we thought we could push the price to $250,000. By the time we listed the property, I was convinced we could get $275,000. We listed the property for $279,900 and had an offer for $275,000 in less than 12 hours, which we accepted. Even thought we sold the property for $50,000 more than we thought we could, we also had over $20,000 in additional expenses we didn’t anticipate. After all is said and done, we made not nearly as much as some would think, in the end, my partners and I split $75,000 on this 9-month project.