House #5: Final Analysis

As of a couple hours ago, The DIY House is officially sold!

This entire project has been insightful, fun, and rewarding — both financially and just from the perspective of renovating a relatively big house. This is the first major rehab we’ve done without a General Contractor, and we’ve quickly realized that managing the projects ourselves not only allows us to get things done cheaper and more quickly, but the added level of control is a great feeling.

At times, we had six or seven different contractors working along-side one-another, which provided some challenges (for both them and us); ultimately, it allowed me to create some scheduling processes and spreadsheets, which will make contractor scheduling much easier in the future.

Here is the run-down of the project results, with the final set of statistics at the bottom…

Timelines

The total holding time on this house was only 86 days! I’m always surprised when a project takes less than 90 days from purchase closing to sales closing, especially considering most of our buyers are FHA, and the rules that go along with FHA waiting periods. But, we got lucky that we found a non-FHA buyer within two weeks of listing, and other than some stress waiting for the appraisal to come back, the closing process went extremely smoothly.

In fact, from a schedule perspective, this project was about as textbook as I can imagine.

Here are the key timeline milestones:

• Purchase Offer Date: 12/7/2008
• Purchase Closing Date: 1/28/2009
• Rehab Completion Date: 3/13/2009
• Sale Listing Date: 3/13/2009
• Sale Contract Date: 3/26/2009
• Sale Closing Date: 4/24/2009

I think we can honestly say that we took many lessons from previous rehabs and applied them here, and everything came together very nicely with a 7 week rehab, a 2 week listing, and then 4 weeks to close…

Financials

We were able to sell this property for $127,500, just $7,000 less than asking, and about $7,000 more than I had forecast in my original analysis. Our total profit after all fees, commissions, rehab costs and other expenses was just under $30,000, also a good bit over my original forecast.

We had originally planned on spending about $40K on the rehab, but had the goal of trying to bring that down to $35K. In the end, our final rehab costs were just a few dollars less than $36K — not bad given our original estimate. The buyer decided not to have an inspection, so there were no requests for repairs or concessions after the contract was submitted, which likely saved us a few dollars these past couple weeks.

Here is the breakdown of financials for this project:

While these numbers don’t reflect the final holding costs — the final utility bills and insurance refunds have not been received — the final results should be within about $200 one way or the other.

In terms of ROI, my total investment into this property (Purchase Costs, Rehab Costs, Holding Costs) was $25,950.35; this puts my ROI at over 110%, and adjusted for the time this project took, my annualized ROI is over 480%.

This makes four sales in a row (all four that we’ve done) where are total profit was over $20,000 and our annualized ROI was over 300%. I’m very happy with our financial results so far.

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: 52 Days
• Rehab Time: 43 Days
• Selling Days on Market: 13 Days
• Selling Close Time: 29 Days
• Total Hold Time (Close to Close): 86 Days
• Total Profit: $29,551.71
• Return on Investment (ROI): 113.88%
• Annualized ROI: 483.32%