House #19: Final Analysis

January 27, 2011 · 6 comments

We sold The Flood House today…it’s was a great project, and the team and I are very happy with the overall results (see Schedule and Financial Results below). In fact, in retrospect, this is probably one of my favorite projects and houses yet…

After the flooding in our area sixteen months ago, we’ve been cautious about buying any properties that incurred major flood damage. Not so much before we were concerned about the rehab/damage, but more because of our concern that the stigma associated with the flood areas would impact our ability to sell the houses.

But, we took a chance on this property, and we were pleasantly surprised. First, we made certain to find a nice neighborhood, where many of the existing owners chose to repair and remain in their homes after the flood…this ensured that there was a decent community around which to rebuild the neighborhood. Secondly, we made certain to find a neighborhood that didn’t look devastated from the exterior, despite the interior of the houses needed complete gut rehabs.

Both of these decisions were ultimately good, as we found numerous potential buyers interested in the property, and we were able to get it under contract within a couple weeks of listing it — even during the winter holidays.

The biggest issue we faced was the appraisals. With so few resales in this area in the past year and a half, there weren’t many comps for this property, but ultimately we got that to work out as well. Ultimately, it would have been difficult to get this property to appraise for any higher than our sale price, but that price was enough to generate a decent profit on this deal.

It’s safe to say that — if the conditions are right — we’ll buy future properties in this neighborhood and other flood neighborhoods in the area.

Now, on to our final analysis numbers:


The rehab on this one was one of the largest we’ve ever done, but the total hold time on the property was actually pretty short — just 100 days. While the rehab took about 6 weeks, we were able to get it on the market, under contract and sold within another 6 weeks.

Here are the key timeline milestones:

  • Purchase Offer Date: 9/14/2010
  • Purchase Closing Date: 10/19/2010
  • Rehab Completion Date: 11/24/2010
  • Sale Listing Date: 11/26/2010
  • First Sale Contract Date: 12/20/2010
  • Final Sale Contract Date: 12/20/2010
  • Sale Closing Date: 1/27/2011


Here is the breakdown of financials for this project:

Flood House Financials

We will clear just over $21K on this project (after including unpaid utility bills we’re waiting to receive). Our ROI on this project was about 31% (we paid all cash and used no leverage on this project) and our annualized ROI was just over 110%.

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: 35 Days
  • Rehab Time: 36 Days
  • Selling Days on Market: 24 Days
  • Selling Close Time: 38 Days
  • Total Hold Time (Close to Close): 100 Days
  • Total Profit: $21,287.89
  • Return on Investment (ROI): 31.08%
  • Annualized ROI: 113.44%

6 responses to “House #19: Final Analysis”

  1. Mark in Fl says:

    Great job and stats!

  2. Shae Bynes says:

    Way to go, J! Congrats 🙂

  3. Dave says:

    J, Another successful project completed! I see on the financial breakdown that you chose to keep the commissions on this project instead of offering them to other agent. How do you decide when to give up the commission or not when buying/selling?

  4. J Scott says:

    Hi Dave,

    We sometimes give bonuses on purchases and sometimes give bonuses on sales. On this project, we gave the selling agent (the agent representing the buyer when we sold) a $1000 bonus. Offering a bonus on the sale helps us find buyers quickly and ensure that the contracts actually go through. For a typical $100K sale, the agent would make about $3000 (3% of the sale price) so the $1000 bonus represents a 33% increase in the agent’s payday, which is huge for most agents who are representing buyers in this price range.

    As for giving bonuses on purchase, we’ll often do this when we work with an agent who either:

    1. We’ve worked with before;
    2. Does a great job of making sure the transaction goes smoothly;
    3. Somehow assists us in acquiring the property (such as letting us know it’s available the day it goes on the MLS).

  5. Fred says:

    Hard to believe your materials only cost $6,600.

  6. J Scott says:

    Hi Fred,

    This was a long time ago, but I’m assuming that for this project (as with all of our gut rehabs), much of the materials cost was rolled into the labor prices. For example, our sheetrock contractors provided sheetrock, our painters provided paint, our hardwood contractors provided the flooring, plumber would have provided hot water heaters and tubs, etc. So, the $6600 would have been for fixtures (lighting and plumbing), finish carpentry materials, windows/doors, etc.

    Here’s a more detailed budget breakdown on this one:

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