As of a couple hours ago, The Red Garage House is officially sold!
This was a long and sometimes frustrating project, mostly from the perspective of trying to sell it. In all, we had dozens of interested buyers, six formal offers, three contracts, and of the six months it was for sale, it was actually under contract about five of those months (just waiting for closings that never came). In the end, we did well with this one, and more than achieved our profit goals; but the fact that we held this property for nearly 8 months has detracted from our feeling of success.
Part of the problem is that, while the house is beautiful, the neighborhood is less so. It’s not a bad neighborhood, it’s just very “active.” Lots of people at all hours, lots of cars parked on the street (and on the curbs), etc. Because the roads and driveways are all narrow, the excessive number of people and cars makes the neighborhood feel very cramped and confined. This is part of the reason why we had so many more interested buyers than contracts; many of the buyers were wishy-washy on whether they wanted to live in the neighborhood.
We’ve already sold two properties in this subdivision — The Hat Trick House (Final Analysis) and The 16-Bid House (Final Analysis) — and we’re now completely out of properties in this neighborhood. Given our overall success with these three properties — we’ve earned over $60K in profit for very little work — we’ll definitely consider future purchases in this area, but for now, I’m glad to be done in there.
Anyway, here is the run-down of the project results, with the final set of statistics at the bottom…
The total holding time on this house was 232 days. Again, most of that time the house was under contract, but still, it’s not fun having to go back to the same property day after day for 8 months waiting for a buyer who is able to close.
Here are the key timeline milestones:
- Purchase Offer Date: 1/12/2009
- Purchase Closing Date: 2/12/2009
- Rehab Completion Date: 4/1/2009
- Sale Listing Date: 3/31/2009
- First Sale Contract Date: 4/17/2009
- Final Sale Contract Date: 9/16/2009
- Sale Closing Date: 10/2/2009
We were able to sell this property for $104,900, just $5,000 less than our originally asking price. Our first offer was full-price, so we were disappointed to not ultimately sell for full price, but given the length of time we held it, I’m not complaining. Our total profit after all fees, commissions, rehab costs and other expenses was just under $29,000, which I’m thrilled with given the long selling period.
The rehab was pretty small, with total expenses at around $17K. We were hoping to keep it to $15K, but with multiple contracts and multiple requests from different buyers, we ended up spending a few dollars here and a few dollars there that were unexpected. Ultimately, the final buyer decided not to have an inspection (we gave her a copy of a previous one), so there were no requests for repairs or concessions after the final contract was submitted; that said, the final contract asked for about $1500 in furniture to stay, so that needs to be taken into account as well.
Here is the breakdown of financials for this project:
While these numbers don’t reflect the final holding costs — the final utility bills, a pro-rated loan-payoff credit and insurance refunds have not been received — the final results should be a few hundred dollars higher.
In terms of ROI, my total investment into this property (Purchase Costs, Rehab Costs, Holding Costs) was $23,542; this puts my ROI at over 120%, and adjusted for the time this project took, my annualized ROI is over 190%. This ROI is a bit lower than what we’ve gotten accustomed to, but again, I’m not complaining.
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: 31 Days
- Rehab Time: 44 Days
- Selling Days on Market: 17 Days
- Selling Close Time: 16 Days
- Total Hold Time (Close to Close): 232 Days
- Total Profit: $28,679.49
- Return on Investment (ROI): 121.82%
- Annualized ROI: 191.65%