Another flip out the door in Houston, TX

[Rawn Wilson]

This is a crazy market, but if you do your research and take your time it will all work out.

Purchased a 3/1.5/2 in Houston, TX.  The value add was making it 2 full baths and opening up the entire living space.  The house was build in 1960 and in great shape, but we did a full gut to update electrical and plumbing.  Of course everything else from sheetrock to fixtures was brand new.  We kept the original hardwood floors and did a full sand and refinish.  We had a few issues with the City of Houston electrical permit inspection (code changes) that delayed up a while, but in the end that was a good thing because the market shot up so fast.

The deal - Purchased for $102,000; Rehab $55,000; On MLS for $205,000; Under Contract for $242,000

I will share something I learned on this one. I have had offers using VA, Conventional, and FHA financing. For this one, I received an offer using the Houston Community Land Trust (HCLT). I was hesitant because of all the criteria it had to meet, but once I did more research, it was a great deal for me. The HCLT offers a grant to individuals who qualify (100-150K), and the buyer must them secure financing for the rest. The deal is, the HCLT will own the land under the house and the buyer owns the home. It is designed to keep housing prices low over the years. You can read more about this on the internet but the best part is, the bank lending the money to the buyer only looks at the ratio of the loan to the appraised value (not the full offered amount). That being said, our house will not appraise for 242K, but will for 180K-200K. The buyer will be getting a loan for approximately 100K, so that keeps them in the 70% loan to value range. Its a win/win.

In fact, the negotiations back and forth were kind of fun. The seller knows they have leverage with the bank, so we did some crafty negotiations.  The initial offer was $230K, but after inspection wanted a new roof (the only thing we did not do) and a few little items done.  We worked with them to get $242K and offer a new roof, fridge, and washer/dryer added.  She gets a practically new house with new appliances and we get more money at the end of the day.

BEFORE looking into kitchenAFTER looking into kitchenHalf bath with closet next to itNEW full bath in primary (took over closet)