All Forum Posts by: Augustus Bukowski

Investment Info: New Construction Single-family residence

Purchase price: $499,950
Cash invested: $675,000
Sale price: $1,692,500 

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

We love new fancy houses and trying out new design elements. Being able to build luxury homes allows us to showcase our skills and try ideas we can't put into our multi family projects. It is fun to spend so much time designing different features in a home, and work with artisans to make your home pop! Some of the unique features on this home were our 3 dimensional honeycomb soap inlays, and our Shou Sugi Ban fireplace pictured below. On top of these design elements we always utilize custom lights manufactured here in Seattle, and large black framed windows to add more wow. Note the ipe hardwood floors in the shower as an extra bonus!

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

The home was on the MLS and had not sold. It was priced a little high, and as we approached day 30. I began negotiating the price. The listing agent dropped the price to what I offered to see if they could get more offers. We shortened our closing window and changed our offer to cash, and the seller accepted.

How did you finance this deal?

We purchased the original home cash. Once we obtained our building permits, we utilized construction financing from a local regional bank. We put between 15-20% of the total project cost down, and were financed the remainder.

How did you add value to the deal?

The property was in bad shape, as it had been someone's flip gone wrong. The home was originally a 2 bed 1 bath, 850 SQFT and was gutted, partially framed, and had minor electrical completed. The project did not make sense as a flip, but we saw the opportunity to start over and build a brand new house. We permitted the site for a new home using the foundation and utilities already onsite, and built a stunning new construction. 

What was the outcome?

We bought the land for $499,000 and built a new home for approximately $675,000. We sold the property with multiple offers for $1,692,500. Both offers were non-contingent, and earnest money released to the seller. After sales expense we netted approximately $424,000 from the sale of this home, and invested approximately $235,000 into the project. The project took 21 months from close to close, and provided an ROI of roughly 180%.

Lessons learned? Challenges?

Whenever you take on a large construction project on a small lot, you have to be very mindful of neighbors. Although we always try and be upfront with neighbors about what is happening, when it will happen, and placate their concerns, you will still run into issues or miscommunications. It is best practice to gather all of the neighbors contact information, and try and communicate important items through email to establish a record.

More Photos and Listing can be seen here as well as a few below. 

Investment Info:

Single-family residence fix & flip investment in Seattle.

Purchase price: $960,000
Cash invested: $650,000

Purchased my childhood home, a beautiful 1915 craftsman in Seattle. We purchased the home to relocate my father and give him the money needed to retire. From there, we have gutted the home to the studs, increased the square footage, and completely transformed the home. This luxurious home is now 5 bedroom, 3.5 bathroom, 3 fireplaces, 2 kitchens, and used over 10 slabs of Marble to complete. We are excited to share this amazing transformation once it is complete in the next 30 days.

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

My childhood home was a beautiful craftsman. It was always my moms dream to renovate the home, but my family never had the means to do so. The home was rundown over the years, but provided great bones and was located on one of the best streets in the high end Seattle neighborhood of Phinney Ridge.

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

I grew up in the home, called my pops, and said hey dad your selling. Although the home was a tear down, I wanted my dad to get top dollar. So we listed the property on the MLS. We got 5 offers for the home, of which all were financed. in its current condition and price, the home was not eligible for financing, so I matched the top offer and bought the home from him with no Realtor Fees.

How did you finance this deal?

I used seller carried financing for closing. Once we obtained our permits for the renovation, I received a construction loan from a local regional bank in the area. We put down 20% of the project cost, and were financed the remainder.

How did you add value to the deal?

We completely gutted the home down to the studs, the only thing remaining in this home was some framing. We expanded the square footage, added an ADU, and put in the highest level of finishes possible on a spec budget.

What was the outcome?

We have the satisfaction of helping my dad close out this chapter of his life and move on to his new life as a grandpa up in Edmonds. The home is not complete yet, so we will circle back once the home is listed and sold.

Lessons learned? Challenges?

Although completing a major remodel can save time on permitting, the amount of time and money you save overall can end up being the same or more than just starting from scratch.

@Greg Dickerson I am building 2 residential assisted living homes in Seattle with 8 beds. I am very interested in building a large apartment sized assisted living facility. I am curious do you know national and regional operators who are willing to partner or lease out the space once its complete?

@Isaac Johnson hands down the best strategy to get started! Especially when you add in Freddie Mac Home Possible financing with 5% down. You can really leverage up your unit count.

@Mark Fries which particular portion looks fake to you? I would certainly like to improve my posts in anyway possible to share these projects with more people.

@Mark Fries what are posts supposed to look like?

@Mark Fries this is a rendering for a 33 unit apartment in Northgate. it looks fake because it’s a graphic depiction of what the property will be. When you submit your plans for permitting Seattle requires these renderings.

@Mark Fries type my name into google, and quit hating on our projects. You can also look them up as all sales are public record.

@Jay Hinrichs as you pointed out, you can lose money on development. Where I see the most people lose, is when they are not doing their du diligence upfront, but at retail price, and don’t know how to develop a property or what it’s exit value will be.

The best thing any developer can do to hedge against risk is to buy and asset that works as the asset itself with upside from development. Example buy a duplex that works as a duplex, but can be redeveloped into a 20 unit apartment.

@Megan Shay sure thing