Fix and Flip Case Study – 5821 Painted Leaf

Fix and Flip Case Study – 5821 Painted Leaf

This property was purchased from the bank as an REO.  The purchase price was $171,500.  Now what many new and even season investors don’t understand is that the list price does not matter.  Yes, worth repeating, the list price doesn’t matter. I have offered WELL over list price and was still not the winning offer.  The list price for this property was $110,999.  After 10 days on the market, our offer of $171,500 was accepted by the Sellers Agent. The home needed work.  There was no kitchen and the large back yard was being used as a dump site by someone who a roofing contractor as there was pile and piles of roofing shingles, plywood, etc.  Often times, when neighbors know a home is vacant, they will take advantage of the opportunity to dump, steal, vandalize the home.  Make it known as soon as possible that the home is “occupied”.

What Happened Next

After a couple of quick weeks, the renovations were complete.  A new kitchen with brand new appliances, new paint, new carpet, drywall repair and we replaced all the door trim that had been removed.  We also rented a couple of dumpsters to remove all the debris in the back yard.  Even though the exterior of the home was a lovely shade of pink, the paint was in great shape and pink is a common color in this area.  We made a decision to leave the exterior color as is.

The takeaway from the renovations is you have to know when to stop.  It can be easy for Rehabbers to over renovate.  The pink exterior was not a neutral color but it was a color that was in great shape and completely acceptable in the neighborhood.

Marketing and Sales

A yard sign was placed in the yard with a call capture number.  I’ll explain more in the next blog about the benefits of call capture.  A potential Buyer called prior to placing the home in the MLS and the Buyer made offer before the renovations were even complete.  Our plans were to list at $258,800 and we accepted the offer at $247, 250. The offer was a conventional loan.

The takeaway for Rehabbers here is to market your property before renovations are complete.  Also, don’t trip over dollars to pick up dimes.  The offer made not have been full price but it was a quick sale and we can then take the money and go find the next deal.

What to do now

Knowing that real estate is cyclical and we have just experienced massive appreciation, I would be cautious.  Cautiously aware are any and all indications of a correction.  This will not be the likes of what we experienced in 2007, 2008 but it will happen.  This is why a real estate market review is critical to understanding your market so you can watch for market indicators and react accordingly.

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