This was a short sale that took a long, long, time to get back approval. A whole year in fact. We almost gave up on it. We actually tried to give up on it. But it kept coming back to us and we finally got to close on it. We picked it up for $105,000. We used our self-directed IRA to fund this deal. The profits can consequently go back into our IRA tax-deferred.
PROJECT CHALLENGES AND OBSTACLES
The biggest challenge with this house was actually the acquisition delay. Once we got it, it was relatively simple to rehab. We had to think carefully about how to layout the basement. We decided to add a bathroom down there to make the space more functional and also to improve our appraised value. There was an awkward bulkhead on the floor of the kitchen over where the basement steps descended. We decided to build a pantry over it to turn it into useful space. Check out the pictures! We had a limited budget with this one, so it was challenging to rehab the house as we wanted without breaking the bank.
The acquisition was $105,000. Our rehab budget was $35,000. Our soft costs (carrying, purchase costs, and sales costs) were about $29,000. We sold the house for $205,000 and made $36,000 in profit.
If I could do it again, I’m not sure I would have hung on for a year waiting to do this deal. The profit was decent but not over and above the average profit for rehab in this area.