We closed on the sale of The WTF House on Friday…
The most interesting part of this project was the purchase (which I’ve already detailed here) and the sale closing. The buyer was scheduled to close on the sale of her current residence on February 14 (was hoping to close sooner) and we were scheduled to close our transaction on February 15. Last week, we found out that she was planning to close her property much sooner than anticipated and told us that she wanted to close on ours the day after she closed on hers. We said sure, as long as she could get the loan done that quickly.
We didn’t think it could happen, but she closed on the sale of her house yesterday (Thursday) and closed on the purchase of our house today (Friday). Apparently, the underwriter for that loan is pretty quick, and the broker was able to get the loan package out even more quickly. My awesome closing attorneys weren’t planning to be in the office today, but rearranged their schedules and agreed to get a temporary office offsite just to get us closed today. At closing, I realized what the rush was — the buyer had 24 hours to be out of her old house, and didn’t have any place to store her stuff or to sleep if she didn’t get into our house prior to the weekend.
It’s been a whirlwind two days getting the house ready to sell (getting the staging furniture out, dealing with last minute closing issues, etc), but it got done. Here are the timelines and financials for this project:
Timelines
Here are the key timeline milestones:
- Purchase Offer Date: 6/27/2012
- Purchase Closing Date: 8/31/2012
- Rehab Completion Date: 10/19/12
- Sale Listing Date: 10/20/2012
- First Sale Contract Date: 1/6/2013
- Final Sale Contract Date: 1/6/2013
- Sale Closing Date:2/8/2013
Financials
Here is the breakdown of financials for this project:
The utilities cost is just a guess, as I haven’t gotten final utility bills yet.
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: 65 Days
- Rehab Time: 46 Days
- Selling Days on Market: 78 Days
- Selling Close Time: 33 Days
- Total Hold Time (Close to Close): 161 Days
- Total Profit: $26,177.81
- Return on Investment (ROI): 57.41%
- Annualized ROI: 130.16%
Hey J –
Congrats on this one. I notice you have “cash out refinance” on here – i assume this means you paid cash at closing and then put a mortage on it after the fact. I’d be interested to hear about how you did this – how long after purchase you did the refi, what the requirements were, did you already line this up with a lender prior to purchase, etc.
It’s something i’ve wanted to do, but haven’t been able to locate a lender that will do a refi in less than 6 months after closing. Being able to refi within a few weeks of purchase would be a HUGE advantage in my market, as cash offers are constantly winning bids over mortgaged offers.
Thanks!
Hey T,
Yes, that’s exactly what happened. About 3 months before closing (after the property had been renovated and listed for sale), we realized that we needed some cash for additional purchases. The lender was a private lender (another investor who I’m friends with) who cashed us out $100K for 1% interest per month ($1000/month).
We used to do this as part of our strategy, and would cash out just a couple days after our purchase with a portfolio lender in my area (a small bank). Unfortunately, they stopped doing rehab loans last year, so we don’t do that anymore.
Hey J,
I hope you are well…Congrats on another one….nice deal…..In regards to cash out refi is it very difficult to get a local bank in our area to do it even after 6 months? I have just bought 2 foreclosures in Gainesville and have a lot of cash tied up….I am just looking and thinking about options down the road to help me lever up my business the best way in the future….Best……Trey Pope
Thanks for the explanation. Sounds like i need to try and locate a private lender 🙂
Hey!
Just came across your awesome blog! I really enjoy how you go trough so detailed with every house that you flip. I will definitely be following more in the future.
Hey Trey,
There are plenty of small banks that will do a cash-out prior to 12 months, but most of them will only cash out up to 65-75% of your purchase price, NOT the appraised value. If you want a bank to cash out based on a new appraisal, you’ll generally need to wait 12 months. It used to be a lot easier, but these days, banks don’t want to revalue the house for at least a year…