Home Run major renovation in Kirkland WA

[Aaron Royce]

Investment Info:

Single-family residence fix & flip investment in Kirkland.

Purchase price: $747,000
Cash invested: $149,605
Sale price: $2,329,000

This project was a large addition to a old single level home in a great neighborhood. Home was 1600 sf, and we added 1200+ sf all on one level, and went for high-end finishes.

What made you interested in investing in this type of deal?

I sat out most of 2020, because I was uncertain what was going on with housing and the economy. But as I watched others doing well and realized the market was continuing to grow stronger, I started actively looking for a deal.

How did you find this deal and how did you negotiate it?

Another investor, I had known for years, brought the deal to me and he needed a money partner. He already had it under contract. It was brought to him by another colleague of ours as a wholesale deal.

How did you finance this deal?

hard money + personal HELOC

How did you add value to the deal?

We took an old run down house in one of the best neighborhoods and added 1200 sf to it and completely redid the layout to make it amazing! Also added covered outdoor entertaining space.

What was the outcome?

We budgeted $250k for the addition and updates, but ended up spending over $450k. Yes $200k over budget and 4 months late! BUT, the market kept moving up, and we had the best product on the market in the area, so we shot for the moon and Listed for $2,279,000. We were not looking for a bidding war, just one solid offer, and we got it! $50k over asking, $150k non-refundable AND RELEASED earnest money, and a guaranteed close. Net profit over $800k split with a partner. Home run.

Lessons learned? Challenges?

Don't try to get discounted engineering and architecture for a high end project. Use the best, and you won't have so many delays with the city. Normally time is money, but in this type of market our delays paid off. Working with cities during Covid is hard, so be understanding with people, BUT DON'T just "trust the system". Follow up - follow up - follow up, if you want your stuff to get worked on. If you are asked to make changes to drawings, ask if they can red-line it for you = saved time.