Purchase Price: $60,000
Renovation Cost: $25,000
Sales Price: $142,000
After Repair Value: $138,000
About The Project
The borrower found the property through a friend and in pretty rough condition. After the previous owners moved out of state, they decided to rent out the property. Unfortunately, the renters destroyed the home with most of the windows being broken and dirt piling up in the house from exposure. As expected, these tenants were evicted. The owner decided to sell the property and our borrower, after developing a strong rapport with the owner, got the property under contract. Since the property was in disarray at the time, our borrower was able to purchase it a favorable figure and received 100% funding for both the purchase and renovation from Longhorn Investments!
Roadblocks and Solutions
At the beginning of the renovation process, a large sink hole was discovered when they removed a bath tub. Apparently, it had been leaking for quite some time and a large hole manifested from the impact. This was not a part of the grand plan and they had to dig out the soft dirt, redo the plumbing, and repack before installing the new tub. This was an unexpected expenditure, however the borrower followed the guidance of Longhorn and planned ahead with a contingency plan of $2,000 written into the scope, which allowed these added costs to be covered by the loan.
After a swift renovation process minus the bath tub hiccup, the house was quickly listed on the market. Selling the property turned out to be a bigger challenge than renovating it though, as the first two contracts that were accepted ended up falling through. The borrower stayed diligent with marketing the property, and ultimately the third contract was executed. This offer ended up being the best of the bunch, and the borrower took home a sizeable profit!