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All Forum Posts by: David Ounanian

David Ounanian has started 65 posts and replied 345 times.

Post: Hoarder House into Luxury High End Flip in St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $157,000
Cash invested: $150,000
Sale price: $427,000

Hey guys this was the absolute worst house I have ever seen and it turns out to be one the most profitable deals in my career! Read how I purchased a hoarder house at a big discount and transformed it into a high end luxury home that sold for over asking price making me $80k+ in profit in the process.

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

The home was in such bad condition that there was a lot of room to add value to the property. There was trash piled waste high in every room and hallway of the house. The sellers needed to sell fast so they could buy an RV and escape their current environment.

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

This was a website lead. The seller filled out a form on my website to get an offer to sell their home. I visited the home the next day and prepared an offer to purchase the home for cash.

How did you finance this deal?

I used several sources for financing this deal and none was cash out of my own pocket. I used a commercial bank to finance 80% of the purchase price. I used a HELOC for the 20% down payment. I used a private lender (another real estate investor) to finance the $150,000 rehab costs.

How did you add value to the deal?

Completely gutted and renovated this home down to the studs. It took 8 dumpsters to empty the trash that had accumulated in this house. New kitchen. We opened up walls to open the kitchen up and moved the basement steps. We turned one of the upstairs bedrooms into the master bathroom with a walk in shower and soaking tub. Added a bedroom and full bathroom downstairs. Regraded all of the landscaping and planted new shrubs and trees. New roof and siding. Staged the home.

What was the outcome?

The outcome was awesome. I ended up listing the property for $399k and got multiple offers and accepted an offer for $427k. After spending $150k in rehab costs I netted over $80k in profit from this deal.

Lessons learned? Challenges?

One lesson learned was to always check in on the contractors to see how they are doing or if they need anything. There were about 2 months during this project where very little got done because the contractors were working on other jobs.

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

Yes I would highly recommend First State Bank. They lended on the purchase price without needing an appraisal of the property. This property was a hoarder house in really bad condition and would not be favorable on an appraisal.

Post: New Investor from St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190
Originally posted by @Gabrielle Barnes:

@David Ounanian I already have one great recommendation towards you and just read your bio and your start sounds very similar to my current situation. Working professional with long hours, I have read tons of books and listened to several podcasts day in and day out and currently have a strategy laid out. I am currently in the process of looking for a portfolio lender. I'll reach out to you for sure once i get things going. Thank you for the welcome and also for offering your help.

 Sounds great @Gabrielle Barnes.  I can send you a few portfolio lenders I've used here in St. Louis if you're interested.  I like the strategy of keeping your job so you can get bank financing to do your first few deals on the side and gain some confidence.

Post: New Investor from St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190
Originally posted by @Chris Fillingham:

I'm a new-ish investor in St. Louis as well. Welcome to the club, @Gabrielle Barnes!  I have one property rented, one in rehab, and 4 more I will be closing on in the next month. My properties are N., S., and W. County areas.   I've been learning a lot and @David Ounanian has been a great help to me. If you're looking for an investor coach or realtor that specializes in investors, you should reach to him out. I'm sure he'd be happy to help you as well!

 Thanks for the kind words Chris!  You rock!

Post: New Investor from St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

Welcome to BP @Gabrielle Barnes!  I'm an investor in St. Louis doing flips and rentals.  Let me know if you need help taking the next step happy to chat. 

Post: My First Big Rehab $100k+ in St. Louis MO

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190
Originally posted by @Stephanie Assi:

@David Ounanian this looks amazing David congratulations on your first big flip!

 Thank you Stephanie!

Post: My First Big Rehab $100k+ in St. Louis MO

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

Investment Info:

Single-family residence fix & flip investment in St. Louis.

Purchase price: $202,000
Cash invested: $130,000
Sale price: $385,000

This was my first big rehab project. Before this, the largest renovation I had done was around $30k. So it was a big jump to be getting into a gut rehab that was going to cost well over $100k. This was a 3/2 ranch home in the Brentwood/Richmond Heights area of St. Louis. House was built in the 1960's and was a single owner with everything inside and out being original.

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

I was interested in this type of deal as a fix and flip to generate income to invest in more rental properties. I didn't have any rehab projects going on at the time when I found this deal. My initial analysis only had me making a $30k profit margin which really isn't all that exciting. But making some money is better than making no money!

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

I found this deal through a real estate agent. This was an off market "coming soon" listing that only I knew about. The agent gave me a chance to buy it AS IS for $210k and I negotiated the price down to $202k.

How did you finance this deal?

I used Midwest BankCentre (PM me if you want my contact there). They were great! They financed 80% of the purchase price and 100% of the renovation costs.

How did you add value to the deal?

We completed gutted the house and replaced virtually everything except for the hardwood floors we were able to refinish those. One of the hidden value adds I found was a 200sqft sunroom that sat between the house and the garage. We enclosed the area and added exterior doors to it so we could increase the listed square footage of the home. This was key because the home sat at 1836sqft and after doing this it pushed it above 2000sqft!

What was the outcome?

The outcome was much better than I even expected! We listed it for $365k and had a dozen offers. We ended up selling it for $20k over asking price ALL CASH and AS IS!

Lessons learned? Challenges?

One of the challenges that came up was that the contractors thought the vermiculite insulation material was asbestos. We thought there would be major costs ($10-15k) with having this material removed properly. But I paid $125 to have an asbestos testing company come out and test it and it came back negative! This was great news and the lesson learned was to always have the material tested before taking drastic measures to remove it.

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

Our lender at Midwest BankCentre was amazing as well as our stager at Stage Right St. Louis.

Post: 148K profit on 4266 Washington Blvd, Saint Louis, MO 63108?

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

@Collin Emerson Miller if it were just cosmetics I'd say you have a chance at pulling it off the rehab for $100k.  With all of that fire damage I would think you are going to be closer to $200k.

Post: Real Estate Lawyer for LLC advice in St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

Hey @Chris Fillingham yes what David M said above is correct.  For example my auto policy liability limit is only $250k.  If I cause an accident and someone gets hurt they can obviously sue me for more than that.  Let's say someone sues and is awarded $1M.  My insurance would only pay up to $250k of that.  For the rest they could go after my shares of ownership in businesses/LLCs or whatever personal assets I own.  Now if I had a $1M or larger umbrella policy it would go above and beyond the $250k and protect my assets and business even further.

Post: Real Estate Lawyer for LLC advice in St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

@Todd Kozak another thing you may not have thought of was getting an umbrella insurance policy to protect your assets as well. Most people don't realize that driving a car is way more risky than owning a rental property. It is more likely that you will get in a car accident than someone slipping and falling at a rental property and it is deemed the property owners fault. If you cause a car accident and hurt someone they can sue you and they can go after your LLC shares. The LLC doesn't protect you against yourself hence why an umbrella policy is probably more important than the LLC itself. Let me know if you need a referral to a good insurance broker.

Post: Real Estate Lawyer for LLC advice in St. Louis

David Ounanian
Agent
Pro Member
Posted
  • Real Estate Broker
  • St. Louis, MO
  • Posts 375
  • Votes 190

Hi @Todd Kozak after working with an attorney we decided that a series LLC would be best for our properties in Missouri. He is really reasonably priced and would be happy to help you out. If anyone needs his contact I would be happy to share it.