House #33: Final Analysis

August 6, 2012 · 10 comments

As of this afternoon, The H2O House has been sold. This was a boring project — that’s a good thing — and there isn’t much to say, but here’s a quick recap (and see all financial numbers below)…

Other than mold remediation taking a week longer than expected (and requiring us to remove a lot more sheetrock than expected) and needing a new AC condenser/coil, there were no surprises on this one. And the fact that we were able to get it under contract while it was torn down to the studs meant that we didn’t need to market, didn’t need to stage and could work with the buyer on some customizations early in the process.

We were over-budget by about 7%, but the appraisal came in at the sale price, which was a little unexpected — so, those two things pretty much evened us out in terms of profit expectations. On this one, we made almost exactly our average profit over all the projects we’ve done.

Here is the full final analysis for this one…


Here are the key timeline milestones:

  • Purchase Offer Date: 4/16/2012
  • Purchase Closing Date: 5/21/2012
  • Rehab Completion Date: 7/3/2012
  • Sale Listing Date: 6/13/2012
  • First Sale Contract Date: 6/13/2012
  • Final Sale Contract Date: 6/13/2012
  • Sale Closing Date:8/6/2012


Here is the breakdown of financials for this project:

Puzzle House Financials

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: 41 Days
  • Selling Days on Market: 0 Days
  • Selling Close Time: 54 Days
  • Total Hold Time (Close to Close): 77 Days
  • Total Profit: $20,783.62
  • Return on Investment (ROI): 25.81%
  • Annualized ROI: 122.36%

10 responses to “House #33: Final Analysis”

  1. T Pope says:

    Hey J Scott. Congrats on house # 33. you have really developed a nice business model and you are very generous to share your knowledge….I have bought my first flip in June, renovated it, and it has been on the market for a month. I am looking for my next project although I am nervous that I do not have any offers on this house yet.( a lot of traffic but no bites) We are probably 10% to high and will drop it in the next week or two…The question I have is what is the best way to find good properties? I use the 60-65% ARV- repairs formula but the only way I have been looking is by asking brokers to bring me properties to look at and there has not been many. Is this the best route without getting my RE license? Also, any advice on selling my property would be greatly appreciated…….T Pope

  2. J Scott says:

    Hi T Pope,

    I would recommend trying several different avenues for acquiring properties. Waiting for brokers to bring them to you is one way, but it relies on agents to actually be looking out for you — wouldn’t you rather take you success into your own hands? If you’re interested in properties on the MLS, ask an agent to set up an automated feed so that you get a list of new properties that hit the market everyday. That way, you can search through the listings and find the ones that might make sense.

    On top of that, you can try direct marketing, bandit signs, public auctions, REO auction, etc. Pick a couple marketing avenues that appeal to you and focus on them. Get really good at two or three avenues, and you should have plenty of deals coming your way.

    As for selling your house, if you know it’s overpriced, drop the price! Summer is almost over, and if you don’t get a contract in the next couple weeks, it’s going to get much tougher to sell once school is back in and families are settled in for the school year.

  3. T Pope says:

    Thanks J Scott…I will take your advice and drop the price of the house…..In regards to finding deals, how well do you feel you need to know an area before you make an offer….i am just wondering about your process using MLS. What are you looking for when scrolling through MLS without an agent’s knowledge of that particular geographic location..In other words, do you look for what could be a good deal, research comps in area to check ARV, and then go see the property to determine rehab costs before making an offer? I have a direct feed from an agent but I do not know the areas well enough to determine if it is a potential good deal. I have had to expand the counties I am looking in so I need a brokers help to tell me if houses are selling in that particular area or are sitting on the ,market for a long time…My first house was brought to me by an agent and then I did due diligence to make sure it was a good deal……Thanks again and any additional advice you can offer would be greatly appreciated……T Pope

  4. J Scott says:

    T Pope –

    I would spend more time learning a smaller area (1 or 2 zip codes) and focus your search in that area. It definitely helps to have a strong knowledge of an area — when you see an address on the MLS, it makes things much easier if you have an idea of where the address is, what kind of neighborhood it is, etc. That way, you can at least narrow the ARV to a range and decide if the deal is even worth looking at further. We also find that houses in a certain area all tend to be the same age, which means they often require similar level of renovations, which in turns means the rehab costs are going to be about the same.

    It takes a while to get to this point, but narrowing down your farm area will go a long way towards allowing you to know a good bit about a property before you ever see it. That way, you’re only driving to the house if you’re pretty sure it may be a good deal.

  5. T Pope says:

    Thanks J Scott. I just sent you an email as well…..T Pope

  6. T Pope says:

    Hey J Scott. I hope you are well….I wanted to give you an update on my first project in Gainesville, Ga…I have cut the price last week( around 7%) and I am getting more showings but still no contract, not even any low ball offers… I have now priced the house right and it should appraise for the asking price…It has been on the market now for almost two months and I am wondering how long would you advise before dropping the price again. I have paid cash so my holding costs are ok but I want to get my first house sold before I commit to my next deal….most of your houses seem to have a contract pretty quickly and I wanted to get your thoughts…Again, you have built a great business and there are a bunch of us out here who appreciate you sharing info/advice with us…Thanks…T Pope……also, do you know of any local investment groups in the Atlanta area that you would recommend me looking into? I really have enjoyed this first project (especially if I can sell it) and would love to network with other people doing the same thing.

  7. J Scott says:

    Hi T Pope,

    In terms of when to drop the price, it’s really going to depend on how much traffic you’re getting and the feedback you’re getting. What are the buyers who are walking through the house saying about it? What don’t they like? Do they think it’s priced incorrectly? Why are they not making offers? These are the things that your listing agent is being paid to find out, and is really the most valuable information you can get during the selling process.

    If buyers are coming through the house but not making offers, there is either something that is turning them off or it’s overpriced. It’s your listing agent’s job to figure out which one it is and correct it. Has your agent gotten this feedback yet?

    Good luck, and shoot me an email if I can be of further help!

  8. T Pope says:

    Thanks J Scott……I will let you know how everyhting turns out……

  9. Daniel S says:

    Hey J Scott,

    On all of your financial analyses (which it is awesome of you to share BTW), you list a “Commission on Purchase” and a “Commission on Sale” as income. Can you explain what these are, please?

  10. J Scott says:

    Hi Daniel,

    My wife and I are licensed real estate agents. On the purchase side of things, we generally get a commission from the seller because we represent ourselves on the purchase.

    On the sale side of things, we pay 6% commission on most sales, split between the listing and the buyer’s agents…since we’re listing the house, half of that comes back to us. So, we’re not really making 3% on the sale, just saving it (you’ll see that that 6% is charged to us on the “Commission to Agents” line in the Selling Costs section and then 3% is credited back in the Commissions section).

    Does that make sense?

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