Residential SFH flip, extensive exterior wood rot, original 1950's wiring, nicotine stains from long term indoor smoking. First flip in VT, solo managing and working with our first private investor.

https://www.stellarpropertysolutions.net/abnaki-ave-vermont/

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

Fix & Flip property deals are hard to come by in this market, which is saturated with buy and hold investors who can offer more at purchase for a light rehab. This house was different in that aspect as it had smokers who lived in the property for 50+ years and the stench was hard to handle during the initial walk through. It got my attention immediately, as the male investors who left as I entered scoffed and stated "You'll need a gas mask to get through this one". I was sold at the challenge.

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

This deal resulted in a realtor referral; offered asking price and went under contract. Our company does not usually ask for a property inspection, but this property had more than a few issues I did not feel confident evaluating on my own. After the inspection, we were able to negotiate sale price down to 127,500, after they rejected my counter at 120,000 to 130k. We always list with the same firm that offers us a referral so we were able to save a small % of realtor commissions this way.

How did you finance this deal?

Cash purchase, cash rehab and we worked with our first private investor who put a small amount in for purchase secured by the property. It's all about building those relationships, so we were more than happy to offer him a higher percentage for his small investment.

How did you add value to the deal?

After purchase, we found out that the walls of this house were not standard 2x6 construction, rather 2x3. To counter this, we had to buff out all the walls in the interior to add R-value and make it energy efficient. We had to replace the roof of the rear of the house which had been an expansion in the 80's with a rolled roof over 25 years old. Refit the kitchen and bathroom with new fixtures and appliances; we were able to recycle all the charming original doors and kitchen cabinets.

What was the outcome?

Rehab budget went about 20k over; we were unaware of the issue of the walls thickness at purchase and the roof rebuild ended up taking an additional month to complete. That said, I felt the upcharges reflected the extra work that had to be done and we were able to build a good relationship with a local contractor who is hungry to keep working with us.

Lessons learned? Challenges?

I was never aware that I should look at the thickness of walls during a walk through; it isn't something I've ever encountered or expect to encounter again. The neighbors told me that house was the builders office when the development was being built in the 50's, so it was built fast and meant to be taken down after the development was completed (but the builder saw an opportunity). We still made a profit, so I view it as a win albeit with a few headaches at our project completion.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We worked with Geri Reilly Realty in South Burlington (great agent, sold house above what I had analyzed it's ARV to be), and Stark Law in South Burlington who were able to cut us a great price for our cash purchase and close at a better rate due to having worked with us shortly before.