From Eviction Wars To $1.4M Profit: A Real Estate Flip Tale
In the volatile world of real estate, flipping a house can often be a complex and challenging venture. This case study delves into one such project, shedding light on the unforeseen obstacles we faced and the strategic solutions we devised, ultimately leading to a profit that exceeded our wildest expectations.
- Purchase Price: $1.5M (via auction.com)
- Size: ~5,000 sq.ft., 5 bedrooms, 5.5 bathrooms
- Landscape: Extensive undeveloped space
Upon purchase, we expected a smooth transition of property possession, as had been our experience with past foreclosures. However, this property came with a unique challenge: a former owner who had been resisting eviction for 13 years, waging battles against the HOA, banks, and multiple real estate agents.
Once we took possession in 2022, we embarked on an ambitious renovation process:
- Duration: 3 months
- Interior: Kitchen and bathroom remodels, new flooring, new paint, and updated light fixtures.
- Exterior: Fresh paint and an entirely revamped landscape.
Problems Encountered and Solutions Deployed:
Financing Hiccups: Our original financing plan involving a hard money loan was hampered by the delay in obtaining possession. This led to a few hefty payments due to the 9% interest rate. Solution? We switched gears and utilized cash instead.
Landscaping: The vast neglected yard demanded attention, especially given the affluent neighborhood setting. Instead of opting for a prolonged landscape architectural planning process, we collaborated directly with a landscape designer and a seasoned landscaping company to realize our vision. This quick decision led to the creation of a breathtaking yard complete with trees, plants, and fountains at a cost of roughly $200K.
Crew Management: To avoid conflicts, theft, and inefficiencies, we opted to hire a single crew large enough to tackle the project in its entirety. This singular crew was managed by a lead contractor familiar with bringing in specialized teams as required.
Supply Chain Disruptions: The ongoing repercussions of Covid meant that supplies were often delayed. Our preemptive solution was to ensure that all materials were lined up well ahead of time.
- Listing Price: $3.55M
- Sale Price: $3.6M
- Profit: Over $1.4M, significantly surpassing our standard 10% profit target.
This project wasn't just about flipping a house; it was about overcoming significant challenges to achieve remarkable success. Our advice to prospective flippers? Embrace challenges. As the Stoics wisely said, "The obstacle is the way." In overcoming obstacles, immense rewards await those who dare.
Whether buying or selling, Trang delivers service beyond comparison. Trang works closely with each of her clients to find their ultimate property in the most premier locations, and secures the best deal. When listing a property, Trang maximizes each property’s market value with her unmatched marketing strategy.