House #16: Final Analysis

April 5, 2010 · 9 comments

We closed on the sale of The Probate House today…

Not only was this was quite an interesting project all-around, but it was the most profit we’ve made on any rehab to date (see financial breakdown below). While we originally found this property back in October (actually, we didn’t find it, our awesome closing attorneys — and our good friends — did), we purchased this property in mid-January. We decided not to do a full rehab on this one for several reasons. First, we didn’t know the area very well, so we didn’t want to take a chance of over-rehabbing it or trying to compete with other retail listings that we weren’t familiar with. Second, it has some very custom features — including tens of thousands of dollars worth of backyard landscaping — and we weren’t positive which features our likely buyers would want to keep.

So, we decided to do all the basics — we remediated the existing mold, fixed some structural/framing issues, did some major waterproofing of the exterior, repaired the roof, replace a lot of bad siding, did some basic landscaping, painted the interior and exterior, replaced a number of light fixtures, and replaced much of the flooring. We had expected to spend about $35K on the rehab, but ultimately we were able to get the cost down to about $21K, as our existing contractors owed us some favors and some new contractors were looking to build a relationship with us.

We finished the rehab about 3 weeks after we took possession of the property, and had it under contract about 3 weeks after that. Because we had only held the property for 6 weeks and because the buyer was getting an FHA loan, this was our opportunity to test out the new FHA rules around having to hold the property for 90 days before selling. Ultimately, it was a crazy process — we had to have multiple appraisals, multiple inspections, provide all our rehab expenses (including invoices) to the underwriter, and just plain undergo a lot of scrutiny to get this deal closed.

The nice thing was that the buyer is a General Contractor (he owns a basement refinishing company), so he was perfectly comfortable with the areas of the house we hadn’t rehabbed (outdated kitchen, outdated baths, old windows, and lots of landscaping work). He didn’t ask for any repairs based on his inspection, and working with a buyer who knows construction made the whole process easy, as he recognized that the work we did was high quality and the work we didn’t do was mostly cosmetic.

Here are more detailed breakdowns of our final schedules and financial results for this wholesale project…


The total hold time on this house was 80 days. I’m thrilled that we now have a broker/lender that can get FHA loans done prior to 90 days, and we’ll certainly use him again on future deals.

Here are the key timeline milestones:

  • Purchase Offer Date: 1/10/2010
  • Purchase Closing Date: 1/15/2010
  • Rehab Completion Date: 2/7/2010
  • Sale Listing Date: 2/8/2010
  • First Sale Contract Date: 2/27/2010
  • Final Sale Contract Date: 2/27/2010
  • Sale Closing Date: 4/5/2010


This property was located in a much nicer area of town than most of our rehabs. We purchased the house through a probate sale (again, thanks to our awesome friends/attorneys) for $70K, put in about $21K in rehab, and sold for about $145K. Average comps in this neighborhood were in the upper-$100K range, so we sold for well below market, which was a win/win for both us and our buyer.

Here is the breakdown of financials for this project:

Probate House Financials

Our ROI on this project was about 44% and our annualized ROI was just over 200%.

Final Statistics

Here are just some of the final statistics that I’ve been tracking for all my projects, and that summarize the success/failure of each project pretty well:

  • From Offer to Purchase Time: 5 Days
  • Rehab Time: 20 Days
  • Selling Days on Market: 19 Days
  • Selling Close Time: 37 Days
  • Total Hold Time (Close to Close): 80 Days
  • Total Profit: $40,869.65
  • Return on Investment (ROI): 43.87%
  • Annualized ROI: 200.17%

9 responses to “House #16: Final Analysis”

  1. […] look at his notes and find out how we can further use these to improve our own rehabbing projects. Click Here or click the image to read the rest of this […]

  2. Bilgefisher says:

    Congrats on the successful flip. Very nice payday. May I ask if you bought this with cash? I noticed the holding costs were very low.

  3. J Scott says:

    Bilge –

    Yup, this was a cash deal (she wanted to close within a couple days of getting a purchase contract when we bought it). It was actually done using funds from my retirement account, so while the profits were nice, I won’t be able to touch most of them for another 30 years… 🙂

  4. Steve says:

    J Scott – Awesome numbers! Congrats. Tax deferred earnings are always nice.

  5. Hakrjak says:

    Wow dude — serious CONGRATS! You just made 2/3rds of my salary for the entire f’ing year….. Going to go get drunk now 😉 haha

  6. Andres says:


    It seems to me like profits were way more attractive for this deal as the numbers were bigger, and it looks like the same amount of work and effort than the other deals.

    If this is the case, wouldn’t make more sense to go after “bigger” deals to maximize your ROI? –measuring ROI not only in cash but also in effort for your team.

  7. Meloney says:

    Hey J and Carol

    I just wanted to say Congrats on the sell. I also wanted to Thank you both and your brother for being the kind people you are. Hope that baby is doing great. Hope you guys have many years of success. Keep up the good work.

  8. That’s a beautiful flip! Hopefully my next one will be similar!


  9. Jason, check out Rule 72. It lets you take monthly withdrawls of principal before retirement. This allows you to have your cake and eat it too without waiting 30 years. Or better yet, you can use that profit to buy next house and profit from that house goes to grow your nest egg exponentionally! Congats.

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