The Numbers:
Purchase for $75,000 through a title company from an investor seller. Connected with seller on Facebook.
This home was in need of a complete and total rehab including foundation repairs. Total repairs came to about $88,540.90 using a new contractor that was under priced, but was not very efficient. Some work had to be redone by someone else.
Holding Costs that includes back taxes, insurance, utilities, and interest, came to $11,605.90.
Settlement Fees that include tax prorations, title company fees, and real estate commissions of $6,750.83.
Profit made was $18,004.62.
We held this house for 160 days including both the Thanksgiving and Christmas Holidays..
The story on this house:
An area wholesale investor was marketing this home for sale at $120,000 on Facebook and we innocently commented that we were cash buyers and might like to take a look at the house.
Problem was the Investor did not yet have a signed contract with the seller and the seller saw our comment on Facebook and contacted us directly. He wanted to sell fast, today, cash and the investor had a 60 day contract.
We looked at and offered $70,000, which we learned was about $20,000 less than the other investor had offered. We negotiated to a $77,000 purchase price if we could close in a week. We agreed, they delayed and we closed in about 2 1/2 weeks.
Our evaluation:
This was one of the larger homes in Western Hills right off Ward Parkway. Much smaller homes about 1/2 the size were selling in the $120,000s and $130,000s. We had comparables up to $219,000.
We felt that the home should be worth about $179,000 all fixed up, but we were a little short on comps, so if worse came to worse we could lower price all the way to $159,000., which we eventually did do.
Repairs:
We did virtually everything to this house and as we stated, we were trying out a new contractor. Contactor did ok work, but was very slow and came with huge drama. We eventually paid him to go away and hired another contractor to finish everything up. All in all, the new contractor probably costs us about 20 to 30 days in extra holding time and costs as he took way to long to get finished and another $5,000 to $8,000 in the 2nd contractor getting paid to do work the 1st one should have done and in redos.
Marketing:
We listed home for sale in the MLS and marketed heavily to local Realtors who work the area as well as the top 20 or so home selling web sites including CraigsList. We listed at $174,900.
We had multiple showings and but no offers so we lowered the price several times until we settled at $159,900 and had a full price offer. After inspections the buyer wanted a few more things done which we added into price to sell for $164, 348.