Full remodel turned into quick profit flip

[Benjamin Riehle]

Purchased a fully gut remodel from a local wholesaler here in Tucson, Az 2 weeks ago for $105,000. Our plan was to spend $100-$115k remodeling this property and then list it for sale. Comps in the area were in the $285-$305k range for a fully remodeled home. 

Four weeks ago we dropped the dumpster to begin demo of the property and one of my sales agents stopped by to check out the project before work began. He came back to me and said he believed we could list the property on the MLS and exit with a decent profit without doing any work. We placed the remodel on hold and decided to list the property as-is for two weeks to see if we could attract a buyer.

Within 3 days we had multiple offers above our $140,000 asking price. We accepted an offer on day two with a 7 day inspection period. On day 6 of the inspection the buyer backed out. We relisted the property and had a buyer offer $135,000 with a two day inspection period and ability to close in 7 days. We accepted this offer and 7 days later successfully closed on the sale. 

Sometimes it is better to take the quick strike and move on to the next deal. We have two new flips locked up and two more in the pipeline. 

Here is a photo of myself and the agent who decided we should list the property. 

[Benjamin Riehle]

@Natalie Schanne, netted just over 23k. We left title open when purchased to reduce closing costs on the sale, we do this with all flips. Also, because I own the sales team the sale side commission paid out is reduced. 

The wholesaler was happy for us. He made about 20k and moved on to his next deal. We closed cash in 5 days for him so he did not have anything tied up. What I have found while working with wholesalers are that there are guys who actually go out and do the hard work to get the deals then there are a lot of middle men wholesalers. When you work with the middle men there is not enough profits left. If you get to the actual wholesalers who are sourcing the deals they leave enough meat on the bone for everyone to make money. 

Our pipeline is loaded for the next 6+ months, which was the driving reason we let this one go instead of doing the remodel. We have a vacant lot we are going to build a 4 plex on. A full gut remodel going from 2 bed 900 sqft to 5 bed 3 bath 2100 sqft. This same property is a double lot so we are gonna lot split and build a second 5 bedroom house. We also have 5 100k+ Remodels lined up for our investment clients that are either flips or long term holds. 

The market is fantastic in Tucson right now and we are trying to seize the opportunity. 

Thanks for reading my post and commenting

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