Over asking price in under 1 week during a global pandemic

[Danielle Bulla Isenhour]

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $85,000
Cash invested: $160,000
Sale price: $218,763

Received $3,763 more than list price in less than 1 week on the market during a global pandemic!

This property was purchased from previous clients that held it for 2 years and were unable to renovate due to success and growth with another business. It was purchased with appliances, several building materials, and already demoed. The negotiation included them owning the house as renovations went on. Ideally, our ROI would have been over 60%, but we put this rehab on the back burner to focus on 2 other flips. Our contract ran out, and we had to purchase the property in cash (no hard money lenders) before the end of 2019. Knowing these were the terms of the contract we ponied up the dollars and closed before the end of the year. At this point, most of rough in work had been completed. The biggest challenge with this property was the design. There were 3 additions, a few level changes, and trying to pick up where someone else left off proved to be extremely difficult. Ultimately, I made the decision to design with Feng Shui, and allow each space to flow into the next. Preserving the 1950's solid wood doors, original back door, stained glass window and keeping as much of the original charm as possible, blending the fixtures and appliances that my previous clients had intended to use, and finally adding a little of my own flare with calming paint tones, modern flooring, and mismatched metal hardware.

Risks:
- created my own contract allowing the Sellers to keep the title in their names as we paid for all holding costs and renovations.
- took this project on knowing it would be on the back burner.
- painted the front door white, because I wanted to leave something for the new Buyer to make their own.
- assumed the appliances were stainless steel and did NOT know they were slate gray until the after the dishwasher was installed!!! Happy with that mistake.
- did not build a garage or shed.

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

Potential for making 60% ROI.

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

Previous clients of mine. The negotiation included them owning the house as renovations went on.

How did you finance this deal?

Cash.

How did you add value to the deal?

Took a burden off loyal clients, and restored this house close to new construction.

What was the outcome?

Taking our time rehabbing rather than flipping made the first buyer that walked in the door appreciate the quality. They offered over list price.

Lessons learned? Challenges?

Learned:
- do not leave a new drill on site.
- have someone hold your 10-foot ladder.
- do not take on more than you can handle.
- brushed Nickel & oil rubbed Bronze hardware work fine together. Everything does NOT need to match.
- go to Bigger Pockets for a contract, and to the Forums for specific advice to your unique deal.
Challenges:
- deciding on the final design.

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

Danielle Bulla Isenhour ;)