Quality Matters

Quality matters. The reno costs on our first Charleston-area flip were nearly double what we budgeted for. But we made a decision before we ever started in this business that our company would add value through quality workmanship, even if we had to take a hit financially.

THE NUMBERS

- Purchase Price:  $55,000

- ARV:  $97,000

- Repair Costs:  $35,000

- Holding Costs: $5,000

- Closing Costs:  $8,000

- Sell Price:  $118,000

- Profit:  $15,000

While we were flipping this house, an identical house in the same neighborhood was being flipped.  It was purchased for the same price, but sold for $105,000.  The quality was questionable, the electric had to be redone after sale and there was no insulation.  The sellers had to make concessions to include the installation of a fence.  

LESSONS LEARNED

- Don't compromise quality.  I am not saying that we should upgrade with unnecessary finishes, but that the project should be done in a way that the new buyers have nothing to worry about for years to come.  

- Stick to the plan.  Everyone told us that we would loose money on this deal, but we decided to stick to the plan and add the value that the buyers deserve.

OBSTACLES INTO OPPORTUNITIES

Anything that could be wrong was wrong with this house.  It needed:

- new roof

- new electrical

- new plumbing

- new ac (installed in attic)

- new doors

- ner floors 

- new windows

- laundry room build

- shed tear down

- new cabinets / counters

- and more

Though this project was a bear, we ended up getting it from closing to closing with all repairs in only 74 days.  And after all was said and done, we were able to add value for the buyer, the neighborhood and ourselves without compromising on quality.  

Summary: Quality Matters.

Mike Nicholson

-Adding Value-