The Leak House: Before Pics


15 comments

Here are some BEFORE pictures of The Leak House:


View From Street

Front of House


Kitchen

View From Living Room into Dining Room & Kitchen


Dining Room

Dining Room


Living Room

View From Dining Room into Living Room


Kitchen

Kitchen


Hallway

Corridor from Front Door to Kitchen (w/Half Bath)


Master Bedroom

Master Bedroom


Master Bathroom

Master Bathroom


Guest Bedroom

Guest Bedroom


Guest Bathroom

Guest Bathroom


Back of House

Back of House


Leak

Drywall Removed on First Level (Apparently from Leak)


Leak

Damage on Second Level (Also from Leak






15 responses to “The Leak House: Before Pics”

  1. Mark in Fl says:

    Are you going to do anything with the kitchn other than paint?

  2. J Scott says:

    Hey Mark –

    Haven’t decided exactly what we’re going to do with the kitchen. We’ll definitely paint, we’ll definitely replace the vinyl flooring, we’ll definitely add new stainless appliances, and we’ll definitely replace the faucet in the sink. We’ll probably leave the cabinets, but we might paint them. And we may switch out the kitchen sink.

    Still working on our final budget on this one. so not sure exactly what’s in and out of the rehab…

  3. Mark in Fl says:

    We’re also replacing those old low kitchebn sink faucets. The ones for $100 at at Home Depot are nice.

    We’re loosing the fluorescent lights and putting in those sexy brushed nickel multi head track lights for $69.

    Mark

  4. Luis says:

    What? You are not keeping the chocolate brown with the vampire red in the background? 🙂

    If the cabinets are in as good of a shape as they look you might get more bang for your buck putting in new countertops and stainless appliances.

    I’m curious, this house looks to be in pretty good shape and at that price is a steal. How come no one picked it up before and why was the bank so willing to give a big discount?

  5. J Scott says:

    Hey Luis,

    There are several reasons why I was able to pick this house up for so little:

    1. The (relatively minor) damage is still enough that the property likely won’t sell to an FHA owner occupant, so the bulk of my competition is gone;

    2. The all-in purchase plus rehab costs are likely about $70K, putting it out of the price range for a smart buy-and-hold investor. So, another large chunk of my competition is removed;

    3. The seasonal downswing (especially around the holidays) affects investors too, so there was probably not a lot of traction on this property in the first few weeks it was listed;

    4. There are a lot of foreclosures in this neighborhood, so new investors may be scared off for fear that there was too much competition (in reality, this isn’t the case);

    5. Smart investors may know that it will be difficult to get properties in this neighborhood to appraise for much more than $100K (as there aren’t many retail sales in this area in the past 6 months), and don’t have the ability to do a quality rehab for a price that would allow them to sell it at that price. We can…

    So, there are a number of reasons why I think things in this neighborhood are great deals, and I still don’t have a lot of competition. I don’t expect that to last very long, though… 🙂

  6. chris says:

    where do get the multi head lights home deport? you are doing a great job and what you said about driving away others is right on worked needed, cash in and location for resell are the key to picking deals. i pick up a house in chas,sc for 70k with 10k in for repairs an 2004 house that sold for 180 in 04 and been empthy for 4years and i hope to sell by 20k under the other houses good luck to everyone for 2011 happy new year

  7. Mark in Fl says:

    The Home Depot Kitchen Light:

    Model # HBTK601P-35
    Internet # 202204120
    Store SKU # 743253

  8. Wendy says:

    Smart investors don’t have the ability to do a quality rehab for a price that would allow them to sell it at that price. But you can? How?

  9. J Scott says:

    Hi Wendy –

    I like to think I’m a smart investor…so I’d have to disagree with your assessment… 🙂

    If you take a look at the Preliminary Budget for this rehab (http://www.123flip.com/house-21-preliminary-budget), you should be able to get a line-item idea of how much each part of the rehab costs. For reference, we’ve done two other rehabs in this same subdivision, both for closer to $16K.

  10. Wendy says:

    Sorry, I didn’t make this assesment… You did, in your own comment under section 5. I’m just trying to get clarification on how you can do it for so much cheaper than others.

  11. J Scott says:

    Hi Wendy,

    There are many reasons for this — here are the first 10 that come to mind:

    1. We keep our contractors very busy, and in return, they give us great prices;

    2. We buy materials in bulk, and get about 15% off retail pricing;

    3. We live within an hour of “the carpet capital of the world,” so we get flooring for about 60% off retail pricing;

    4. We get in and out of our projects very quickly, so we save on holding costs;

    5. We generally pay all cash, so we don’t have any loan costs, which can significantly eat into profits;

    6. My wife has her real estate license, so we earn 3% commissions on the purchase side and save 3% commissions on the resale side;

    7. My wife is an expert stager and marketer, so she is able to get top price for our sales;

    8. We have a very successful strategy for getting our appraisals to come in at the contract price (this is where many other rehabbers are struggling);

    9. We have a full-time project manager on-staff who manages our subs, which is ultimately cheaper than hiring a GC (which can add up to 20% to rehab costs);

    10. We have gotten very good at rehabbing to the point where buyers love our houses, but not over-rehabbing (many rehabbers under-spend and can’t sell or over-spend and eat into their profit.

  12. Wendy says:

    Thanks for the response. Aside from being present during the appraisal process and pointing out “your” recent sales, what other strategy is there when it comes to appraisals and appraisers? How do you control this? In my market the appraiser makes an appraisal without as much as even entering the property. They simply look at recent sales of similar properties bases on square footage, bd rms, bath etc, and base their appraisal from that and a photo of my properties without even seeing it in person. This seems unrealiable and unethical. How do you over come this or is it a factor?

  13. J Scott says:

    Wendy –

    Check out this article I wrote for BiggerPockets.com:

    Controlling (And Conquering) Your Appraisals

    As for appraisers not seeing the inside of your property, that seems crazy to me. If you witness that happen and the appraisal doesn’t come in at value, I would complain to both the underwriter and the appraiser’s company.

  14. Wendy, if there is one thing I have learned in this business is that contractors have two sets of pricing. The one for John J. homeowner and the one for investors that give them regular work and refer them to more work. I have surprised myself at the price I can get for parts and services when you dig, ask and prod enough.
    When a contractor sees what you are doing to a property and why their motivation changes. Think about it, the typical homeowner will buy a full HVAC system every 10-15 years or more, I have bought six in the last year and that is low compared to J or other serious rehabbers.

  15. Wendy says:

    Thanks for the responses. I will read the bigger pockets block.

    I am fully aware of discounts and shopping around. I’ve saved thousands in my current project where my original estimates came in at over 85K, is now at less than 39K. Again, it helps to shop around with reputable contracters. In the last twelve months, I’ve replaced four HVAC’s including tons of duct work additions. Fully insulated one property and replaced 24 windows. So, yes I am fully versed.

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