Estate Auction Flip; total rehab and stage

[Laurie Isabell]

Investment Info:

Single-family residence fix & flip investment in Bainbridge.

Purchase price: $48,000
Cash invested: $50,000

One owner estate auction purchase. Really good bones, but major need of updates. Completely overhauled- all new wiring/200amp service, insulation, drywall, marble, refinished floors, took down walls, added closets &bathroom to create master bedroom ensuite. Fully staged myself, just listed on MLS using flat fee service. Excited about trying this non conventional listing format to maximize returns.https://www.realtor.com/realestateandhomes-detail/5-Kirby-St_Bainbridge_NY_13733_M35250-33358#photo0

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

Have always loved design and decorating. Felt I had the skills to take this on and wanted to put them to the test, Chip and Joanna style!

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

Actually was high bidder on some various items sold in the initial estate belongings auction from auction house I frequent. Pick up was in the house that was later to be auctioned off online. It was extremely outdated, but had good bones and an even better story. One owner, well known local business owner, built himself in 1940, just passed away at 104 1/2! Just he and his wife lived there whole life.

How did you finance this deal?

Cash savings. Bidding was very low, in 22k range until last minute interested party that drove price up.

How did you add value to the deal?

Leveraged labor, extra materials, dumpster fees and more to another investment property around the corner. This is a two family that will be a rental and gained efficiencies with proximity of property and timing, but didn't need the same quality as a well done flip.

What was the outcome?

Just listed on MLS today! Very pleased with final product, made some great contractor relationships that will be key to future projects and best of all, truly had fun. Now let's hope it sells quickly, despite missing the key selling season. Project took longer than expected.

Lessons learned? Challenges?

Auction buying requires discipline- easy to get caught up in the bidding. Need to fully consider costs of the essentials- wiring, etc as add significant costs. Especially with new codes. I.e. Arc Fault breakers, new smoke detectors-- All adds up FAST! Manage labor costs better. Paid contractors hourly and while pleased, sometimes felt like a blank checkbook. Will set better project timelines and develop milestone incentives to keep contractors on task. Won't spend own cash next time if possible.

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

All aspects here done without agent. Am interested in getting my license and have strong marketing background. Decided to do flat rate MLS service to save money and experience sales process myself. Do feel MLS is essential vs. Straight up FSBO. Am offering standard split 3% buyer's agent commission, but pay nothing if buyer comes directly to me.