A Colonial Beauty Ready For Rehab
Another fix and flip was purchased today. This was a property on the MLS, but was not a short sale or an REO. It was actually a home that was inherited by two siblings (neither of which liked each other very much by the way). The home is in need of quite a bit of work, but it was not a complete wreck like your typical foreclosure. While my profit won’t be as high on this home, I’m comfortable with it because we pretty much plan on replacing everything. This leaves little that can go wrong, although anything is still possible. What I love about this home is that there is very little a potential buyer can complain about. It is on a quiet block in a good neighborhood, it’s a colonial which people love, it has a basement and is on a flat piece of property that backs up to a nature preserve. This is a 4 bedroom, 2 bath house so there is plenty of space for a large family. Lately some of my flips have had one detracting factor or another. One was a flag lot (which I love by the way), but people were concerned with snow removal in the winter time. Another one of my flips only had 1 bathroom which can be difficult to sell for obvious reasons. My latest flip that I am working on is on a hill with a bunch of stairs so that will be a challenge. When you put so much time and effort into a project and people start picking apart certain things, you can take it personally, but you do have to remember that buyers need to do what is best for them. In the end if they are happy with your finishes, but are less than thrilled with something that is out of your control (i.e. location) then you just have to accept that. The best way to overcome that is to make the house so spectacular that they overlook some of those other flaws because they know they won’t find a house like this anywhere else.
Rehab Budget & Scope
I plan to spend about $55,000 – $60,000 on repairs. This will include a new roof, siding and windows. We will be redoing the kitchen and the bathrooms. Additionally we will refinish the floors, replace all the trim, update the electric and naturally paint the entire house. The roof siding and windows will be the biggest expense, but it will also have the biggest impact. Some people really underestimate the power of curb appeal, and as you can see from the photo of this house, curb appeal is not something it currently has. People love a home with cedar impressions in the front which is exactly what I will be doing. We will use granite grey colored siding with a charcoal roof. As far as the kitchen is concerned, we will do your typical white shaker cabinets and granite counter tops, but I am still undecided on what kind of back splash I will install. I want something unique and cutting edge!! Floors will be stained with a dark walnut color. My wife prefers the combination of Ebony and Jacobean at a 1:1 ratio, but to be honest I think that’s a little dark. If you look at the floors the wrong way they get dirty, so that is my gripe with them. Bathrooms will hinge on how our latest style using grey subway tile and wood style floor tile works out. If the combination is a hit, then we will repeat it in this one. I’m hoping to be done with the repairs on the home by late January – early February which will allow me to market this home at the right time.
How Did I Get a Potentially Profitable Flip from the MLS?
If you read one of my recent posts, you will see that the MLS has become almost completely devoid of any opportunities. Yes the listing price of many homes will allow you to make a profit, but typically the final sales price is well above the list price thus removing any chance of that. The key in this particular deal is the fact that this was not a distressed sale which allowed it to fly under the radar. This is one of those listings that because it didn’t have the REO/Short sale label attached to it, investors subsequently overlooked it. Additionally because the condition of it was not going to hold up to an FHA inspection, many retail buyers did not look at it, and let’s face it most buyers prefer move in ready anyway. If they didn’t, investors would be starving. Nonetheless, I still had competition on this listing and had to push my offer to the max in order to get it. Like I said, the opportunity to take on a house and transform it into the perfect colonial home for a couple was too good to pass up. Even though I stand to make the least amount of money on this flip, I’m very excited to see the finished product. I love a house where you know you have to redo everything which makes life a lot easier for me. Playing the game of should it stay or should it go detracts from the time I should spend finding deals and improving my business.
What’s Next on the Horizon
We have another deal under contract through our direct marketing campaign which I will update you on once it is closed, but that one will be a major renovation. I estimate over $90,000 in work, but it is also a home with a ton of potential. I will keep you all posted with the status of our House on the Hill flip in Rocky Point which we should be finishing up shortly after Christmas. Of course I will also put photos up of this flip as we move along. Thanks for reading and if you have any questions, please feel free to reach out to me at Jeremiah@SuffolkCountyHouseBuyers.com
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