Foundation Fiasco: Navigating Unexpected Challenges in Nashville

[Julie Muse]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $190,000
Cash invested: $1,700
Sale price: $215,000

Partner Driven, in collaboration with Seth Choate, faced an unexpected challenge with a deal on Donna Kay in Nashville, TN. We bought the property on 3/8/2024 for $315,000, expecting an ARV of $315,000 after addressing a foundation issue and completing renovations.

During the inspection period, we received a quote of $16,284.72 for foundation repair and $23,800 for subsequent renovations. However, just before work was scheduled to start, the foundation company informed us of severe, uncontrollable settlement issues that made repairs unfeasible.

Given the significant delays and additional costs this would entail, we made a quick decision to sell the property to another investor. This experience underscored the importance of making timely decisions, as time is money in real estate. Despite the setback, Partner Driven remains committed to navigating challenges and ensuring successful outcomes for our partners.

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

Our interest in the Donna Kay deal in Nashville, TN, was driven by:

Strong Market: Nashville's robust real estate market.
Profit Potential: An ARV of $315,000 presented a clear profit opportunity.
Location: The property's desirable neighborhood added to its appeal.
Collaboration: Partnering with Seth Choate provided local expertise.
These factors made the deal an attractive investment for Partner Driven.

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

We discovered the Donna Kay deal through our partner, Seth Choate, who identified the opportunity in Nashville, TN. Seth brought the deal directly to us, following our strategy of sourcing deals straight from sellers. Together, we negotiated the purchase price of $315,000 by leveraging our market knowledge and strategic approach, ensuring favorable terms for this investment.

How did you finance this deal?

We financed the Donna Kay deal using Partner Driven's capital, covering the $190,000 purchase price. Our intention was to also finance the renovations, ensuring the project could move forward smoothly. This approach provided the flexibility needed to address unexpected challenges, such as the foundation issue we encountered, without delays.

How did you add value to the deal?

We added value to the Donna Kay deal in Nashville, TN, by first cleaning and clearing out the property. We secured a comprehensive plan for renovations, including a quote for necessary foundation repairs. When severe foundation issues arose, we quickly decided to sell the property to another investor instead of delaying. This swift action minimized potential losses and showcased Partner Driven's strategic flexibility and efficiency in real estate investments.

What was the outcome?

The outcome of the Donna Kay deal in Nashville, TN, was a swift and strategic decision to sell the property to another investor. Despite initially planning for renovations, severe foundation issues led us to pivot quickly. By selling the property, we minimized potential losses and avoided costly delays. Importantly, we made a profit on the deal, demonstrating Partner Driven's ability to adapt and make timely decisions, ensuring successful results for our partners and investments.

Lessons learned? Challenges?

The Donna Kay deal in Nashville, TN, taught us valuable lessons and presented challenges. The main challenge was discovering severe foundation issues late in the process, requiring a quick pivot. Lessons Learned: 1. Obtain multiple quotes from foundation companies, even if references are checked. 2. Timely decisions can minimize losses. 3. Early inspections help identify potential issues sooner. These lessons emphasized the importance of due diligence, flexibility, and quick decision-making .