Project Case StudyAnalysis of a Brownstone Realty Group Project
116 Howland Road, Assonet, MA
Projected Completed Fall of 2013
Purchase Price: $116,000
Rehab Budget: $55,000
Carrying Costs: $32,000
Total Investment: $221,000
Real Estate Commissions: $14,000
NET PROFIT: $45,000
How Did We Source This Deal?
This deal was an off-market opportunity which was discovered on a daily run by one of our joint venture partners. On this morning run in his neighborhood he noticed the extremely tall grass and dilapidated state of the property and began to investigate. After further research and inquiry he was able to contact the current owners family and discover that in fact the property was available. The home was managed by a family member for a father who had been placed in a assisted living facility nearly 2 years back. Being that they still needed to pay property taxes and the father was never going to leave the nursing home it was determined that a sale was the best course of action. The extreme cost of assisted living caused a lien to be placed upon the home and therefore require the home owner to sell at established market value which is determined by an impartial appraisal. The family members were not able to turn a profit as the debt to the state outweighed any value garnered from the sale. After this was done the price was set and we submitted the offer and it was accepted.
What Were the Details That Influenced The Plan With The Rehabilitation?
In order to establish the budget we first evaluated the market for properties of similar nature. This 3 bedroom, 2 bathroom Cape style home is very common in this region and therefore had many comps within region. This provided us a very clear understanding of aftermarket value. That fact allowed us to very easily able to establish the maximum amount we were able to spend on the rehab and still gain a comfortable return. There were a number of mandatory items which needed to be addressed, such as the septic and heating system. From there we determined the best way to spread the remaining budget on cosmetics.
What Were Some Lessons Learned On This Project:
Never overlook an empty home you see in your travels! While not all, or many are available, keep in mind that it is a numbers game. A little educated digging and research and you are generally able to determine the availability of a property and any necessary hurdles you may need to clear those hurdles. Many times they are not available now, but will or may be in the future.
Before and After
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