Difficult Layout house

[Ramon Oropeza]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $145,000
Cash invested: $90,000
Sale price: $328,000

The house was in desperate conditions, but I loved the original architecture of the house, I could see that it was not a cookie cutter type of house for the area. I took the risk of buying it, knowing that the pool of buyers were going to be smaller given the fact that the house had an upside down layout, meaning, all the social area was on the main floor and all the family room and bedrooms were in what you could consider the basement.

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

The house was a bank owned property and I was able to negotiate the price a bit down from the listing price, I dont think I had any competition at all given the condition of the house and the awkward layout. I simply believed in my vision of what the final product was going to be.

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

I work with a group of realtors from my office in KW Morristown. I found the house driving around the area, they finalized the negotiation for me.

How did you finance this deal?

My own cash + some investors funds.

How did you add value to the deal?

Creating a fantastic kitchen, changing all the lower level windows, cutting trees around the perimeter of the house, changing the roof and adding 100% new HVAC system. 100% renovation of the 2 bathrooms and creating a non existing outdoor patio. The house after the renovation was stunning.

What was the outcome?

As I said, I felt very proud of the end result. The house was sold on the first open house. I had multiple offers and it went over asking price ($310K) for $328K

Lessons learned? Challenges?

Trust your gut. Awkward layouts might be a problem and I dont recommend running unnecessary risks, but assess the overall potential of the property. In this case, the house had a lot to offer if the people could see beyond having the bedrooms downstairs.
I over did it in the designing of the overall house to compensate with the flaw of the layout, and it paid off.