Cat Litter House: Flip # 653 and it could be the worst one yet. Look at the pics and you decide.

[Brian Burke]

Some flips are easy...paint, carpet, clean, and list.  Then there are the hard ones. 

I've never posted a diary of a flip before.  With over 600 flips under my belt I sometimes think that I've seen it all.  Then I see something I haven't seen before.  This time, It's so outrageous that I couldn't resist sharing.  I'll share the visuals, but fortunately for you I can't share the smells.  This is kind of a diary and kind of not...I bought it in January so you don't get the day-by-day play-by-play, but it's not done yet so this isn't old news either.

I came across this deal from a wholesaler who I met on BP (thanks yet again BP for making me money).  He hadn't seen the house in person but he had heard it was in bad shape.

I sent my acquisitions guy down there to look at the house. When he came back he said, "that's the worst house I've ever seen." At first I thought "Come on, really? You've looked at over a thousand houses for me!" Ultimately, I took his word for it. We threw a number at the rehab and ARV and made an offer. It was accepted.

Here are the numbers:

ARV $400,000 (probably a little more, I hope)

Rehab $175,000 (probably a little less, I hope)

Since there were some unknowns I had to make a conservative offer.  It would take a while to fix this place up, so I had to add some margin to cover the carrying costs. 

My offer: $125,000.

Closing was about a month later.  The seller agreed to move out and leave the key at the title company.  On move-out day, I went down to the house to see it for myself for the first time.  When I opened the front door, this is what I saw.

Ok, so now I knew that my acquisitions guy was right!  We were in for it!

Have you ever seen anything like it?  Wait, it gets worse.  More to follow!

[David Torres]

Originally posted by @Brian Burke:

Originally posted by @Account Closed:

@Brian:  when you have time, I have rehab questions. I'm always on the look out for when economy and goof taste come together, so I'm looking at it with a totally different eye than your buyer.

 Is the flooring product on the main floor engineered wood flooring, or laminate?  The listing says laminate, but it looks better than laminate in the pictures.

Where's the utility/laundry area in this house?  I'm familiar with the house layout as there's a subdivision in one of my farms with same houses built 1976 - 1982. The laundry closet has been near or under the stairs.  Is there a utility area, or are the hookups in the garage?

Is the 4th bedroom an office off the family room area?

What was the thinking behind the double door entry to the master bedroom?  Was it that way already?

Is the back patio poured, or is that just block set on top of sand or dg to suggest patio?

The flooring is laminate, but I agree that it looks like engineered hardwood.  It's just really good laminate, and it's really inexpensive.  Well, we just negotiated a really good deal on it, I guess volume counts for something.

Laundry room is between the family room and the garage.  It's adjacent to the downstairs half bath, which is adjacent to the staircase.

The fourth bedroom is really a den or office.  Originally it was part of the master bedroom as a sitting room.  This floor plan was originally built as a flex plan with a builder option of master with a sitting room or 4th bedroom.  Looking at the market, I noticed that there were very few 4-bedrooms on the market so it seemed the way to go.  Putting up one wall gives the 4th bedroom, but it's too small to put in a closet.  So it's a den.  But it's now downstairs by the family room, it's upstairs.

The double-door entry to the master was an existing design.  While the doors are new, the opening isn't.

The back patio is pavers on sand.  This allows flexibility if the new owners wanted to tear it out and do a deck or something different.

 Brian, the house looks phenomenal!  It is truly a wonderful feeling to take the problem house in a neighborhood and turn it into a place that someone can call home.

The flooring looks great but I have a few questions.  

First, would you mind sharing the source and model number of the laminate?

Second, while I think it flows and looks great, I thought you were not supposed to use laminate in wet areas like the kitchen.  As an experienced rehabber, what are your thoughts?

Third, what are your flooring choices in the bathroom?  Also if you could enlighten us on what type of carpet you are using. From the pictures, it is hard to tell what kind of grade it is.

Lastly, why did you make those choices?  As a new rehabber it is difficult for me to bakance out all of the potential "upgrades" vs the value they bring to the project.  

[Brian Burke]

@David Torres thanks for the compliment!  It really did turn out well, even if I do say so myself.  Not that I actually did the work myself...

The laminate is German Flooring, can't remember the style number but my project manager has it somewhere.  It's bought from a local flooring store not from HD/Lowes so I'm not sure if it's available everywhere or not.  I have no problem using laminate in wet areas such as kitchens and half baths.  I probably wouldn't use it in a full bath but I'm not saying that you shouldn't.  I wouldn't because of decorating choice, not because of suitability.

Bathroom flooring was travertine in the master and ceramic tile in the hall full bath.  Carpet was from Lowes, and is a mid-grade.

As to "why" these choices...the selections were made because they look good and they fit with the price point. Price of the materials was a secondary consideration but not lost on me. In this price range, you can afford to (and are expected to) step up your game on material selections. If this were a $100K ARV house, my choices would have been different. I don't try too hard to bring value via upgrades, I think that the incremental value is minimal...instead I try to rehab to the market. At each price level there are expectations as to the level of quality in the finishes. If you rehab an expensive house with cheap stuff, people see through that and it doesn't work. On the other hand, if you try to use million dollar home finishes in an inexpensive house, you won't get your money back out of it.

[Account Closed]

Wow,

That is an amazing transformation, that is truly a nightmare scenario but it would worse if an amateur had bought it and wanted to flip it. It would be a lesson you'd never forget.

[John Casmon]

@Brian Burke what an incredible rehab. I hope buyers appreciate the work, effort and forthright approach you've taken to restoring and marketing this property. Thanks for sharing!

[Account Closed]

Originally posted by @Brian Burke:

@David Torres thanks for the compliment!  It really did turn out well, even if I do say so myself.  Not that I actually did the work myself...

The laminate is German Flooring, can't remember the style number but my project manager has it somewhere.  It's bought from a local flooring store not from HD/Lowes so I'm not sure if it's available everywhere or not.  I have no problem using laminate in wet areas such as kitchens and half baths.  I probably wouldn't use it in a full bath but I'm not saying that you shouldn't.  I wouldn't because of decorating choice, not because of suitability.

Bathroom flooring was travertine in the master and ceramic tile in the hall full bath.  Carpet was from Lowes, and is a mid-grade.

As to "why" these choices...the selections were made because they look good and they fit with the price point. Price of the materials was a secondary consideration but not lost on me. In this price range, you can afford to (and are expected to) step up your game on material selections. If this were a $100K ARV house, my choices would have been different. I don't try too hard to bring value via upgrades, I think that the incremental value is minimal...instead I try to rehab to the market. At each price level there are expectations as to the level of quality in the finishes. If you rehab an expensive house with cheap stuff, people see through that and it doesn't work. On the other hand, if you try to use million dollar home finishes in an inexpensive house, you won't get your money back out of it.

Like wow on the price for the German Flooring laminate.  And you probably get a great bulk discount too. No doubt you know how to step up your game.  But that is some inexpensive, I mean affordable, good looking flooring.

[John Weidner]

@Brian Burke 

Any update on offers?

I admire your disclosure strategy yet also I've exited deals over disclosure requirements in Illinois.  Being licensed it gets more complicated.  Best of luck!!  

[Brian Burke]

@John Weidner we've received a couple of offers, both retracted after seeing the disclosures.  We decided to have air samples tested for mold and endotoxins.  I don't expect any negative findings but I think it would give buyers confidence that this home's history is history.  The test cost $1,500 and I expect results early next week.  Money well spent in my opinion for piece of mind.  We have several potential buyers circling awaiting the results.  With test results in hand we'll also be ready to hold a broker's open.  I should have thought of the air test before we put it on the market...live and learn.

[Joseph Cox]

I wonder if this house was ever featured on Hoarders: Buried Alive?

[Joshua Springer]

Based on his description I think it was the animals, not the hoarders, being buried alive.

Awesome rehab...with all the emotion that comes with purchasing a personal property for most people I can see how an air test would be a great solution to calm some fears of future issues arrising.  If I were purchasing it as a consumer I would think knowing your extensive rehab history would be calming as well.

[Account Closed]

Unbelievable. Well done!

[Brian Burke]

UPDATE:

The air tests came back.  As for mold, the indoor air was actually cleaner than the ambient outdoor air (how does that happen?).  As for endotoxins, we got a clean bill of health with levels well within acceptable range and very close to ambient outdoor air (the environmental consultant actually defined it as "excellent").  

Now we spread the word with the local agents and schedule the broker's open.  Or maybe it sells over the weekend. Time will tell.

[Bruce May]

Thanks for sharing such a great transformation @Brian Burke  . I have done one hoarder house and it was no where near as bad as yours, even though I too found a possum inside that had recently died. I appreciate all the details you provided to transform this house into what it is today and I hope it sells quickly for your asking price.

[Kelly Heraux-Arana]

Wow! What a page turner.  @Brian Burke you should write a book solely based on this experience.  I am not entirely sure that had I been in your shoes I would not have made a U turn toward the exit and kept going. Hopefully when it is my turn I meet the challenge and succeed as you have.  Great work!

As one of the first posts I have read on this site, this was eye opening, entertaining, thought provoking, and full of great information.  This gives me great hope for my future in this community.

Does anyone know if there is a forum specifically dedicated to before/afters like this post? One of the best ways of learning is through other peoples' mistakes and successes.

[Brian Burke]

@Kelly Heraux-Arana first of all, welcome to BP!  My wife keeps telling me I should write a book, I don't know where I'd find the time. Maybe I will someday (when I find a ghost writer!). LOL

Check out the Success Stories forum, there's lots of great stuff there.  Also check out the podcast. Shameless plug:  don't miss podcast #3 and #76!  :)

[Tyson R.]

@Brian Burke I read this a week or so ago and was just wondering if any new offers have come your way. This is truly an amazing transformation. My wife almost convinced herself that she could smell the cat pee as we looked at the pictures together. The final product is amazing! I hope it sells quickly.

Keep it coming!

[Steven Rhodes]

Well @ Brian Burke, I must say that that is one great rehab. Looking at the front yard's before picture, that house was the perfect hoarder's house for a hoarder to live in! That tree blocked most of the view from prying eyes. After that you would just have to contain the stench (Which I could not even guess, for the life in me, how they pulled that off).

With that being said; now that you have some time, to look back on it all, is there anything that you would have done differently and why?

[Raymond B.]

@Steven Rhodes,

To make the @ work, do the following:
Hold down the shift key and type @?
Look below this Window, and you will see a list of names of people that have posted in this thread.
Click on the name of the person that you want notified via an email, that you responded to them.
If you are a Colleague with anyone that has NOT posted in the thread, and you want them to see your post, hold down the shift key, type the @ and the first 4 letters of their First or Last Name.
Then look below this Window and click on that person's name.
Raymond

[Steven Rhodes]

@Raymond B. 

Thanks a bunch. I think I accidentally did it one time but I could not remember what I did to pull it off. Thanks again.

Steven

[Brian Burke]

@Tyson R. I have received a couple of offers, and will be responding to those today. 

@Steven Rhodes yes!  I would have done the air quality test prior to putting the house on the market.  When it first came on the market I had a couple of offers but both backed out once they saw my disclosures describing the property's former condition.  I think that if I would have accompanied those disclosures with the air quality report that we now have, those buyers would have taken it for what it was and not formulated a scenario of their own that is worse than reality.

[Wendell De Guzman]

This is awesome @Brian Burke ! How you were able to turn around this cat litter house to this awesome home...is just amazing. Congratulations and I hope you sell this house and make HUGE wads of CASH!

[William Allen]

We need an update, sold yet?

[Jerald Alford]

@Brian Burke  Compliments to you and your flip and hats off to your GC as well. Looking forward to the latest updates on the sale.

[Brian Burke]

@William Allen and @Jerald Alford , I accepted an offer a week or so ago.  The buyer signed off on all of the disclosures, and did inspections this week.  So far, so good. Superstition prevents me from saying much more until the deal closes and the wire hits the bank.  :)  Check back in a couple weeks, once it closes I'll have a full update with all of the numbers!

[Micheal Rieves]

Wow! There is a house here I felt good about turning because it also has stuff pretty much to the ceiling with small walking trails. But..... after seeing your pictures, I have to say I am not so interested in it anymore (at least not at this point in my career).  

[Micheal Rieves]

This was an amazing transformation. Thank you for sharing all the information.