Longhorn borrowers purchased this property from another flipper that had just bought it at the Sherriff sale. This flip was in a pretty rough neighborhood, just outside of downtown, but the area had a lot of potential and interest in revitalization. There had been a few minor flips completed in the area, but $175,000 and $200,000 was the highest sales price. They planned for a higher end finish and thought it could sell for between $225,000 and $250,000. A budget was put together that included opening up the first floor and installing a new half bath but keeping as much as possible intact. The renovation would also include a new kitchen, master bath, hall bath, mechanicals, and paint & carpet on the interior. Outside, they planned to scrape and paint the wood siding, repair any rotted wood, and install a new roof.
Initial delays and contractors issues did not allow renovation to begin for about 60 days. Once work began another home in the neighborhood was being finished by a well-known HGTV television show. They planned to list it at $400,000. This presented an interesting opportunity for our borrower and they decided to regroup. Focusing on a higher end of the market meant more renovation and finishing out the basement. It would be the first completely renovated and finished basement in this specific area. This adjustment would add more square footage and livable space to the property, justifying a target price in the mid $300,000 range. Thankfully the borrower was prepared with sufficient reserves to complete the additional scope of work. The extra update was ultimately able to add an additional $150,000 in potential profit to the deal! The property was listed and sold in two weeks for $350,000. The HGTV home eventually sold for $289,000.