A neighbor, Frank, trolls the REO market, looking for bargains to buy, fix, and flip. He's pretty good at it. He always pays cash for the houses and the removations.
His contractor can take a house, update the kitchen, baths, tear out walls to make it an open concept floorplan, install new wood and tile flooring, hang new drywall, paint it, install new landscaping, and dress up the exterion in five to six weeks. Frank typically gets multiple offers the first weekend the house is on the market because the houses are in new home condition.
Frank usually buys houses for $300,000 to $400,000, and puts $80,000 to $90,000 of upgrades into the houses, and sells them for $500,000 to $600,000.
I saw Frank out on the driveway in front of his house, so I slowed down to say "Hello". Frank told me that he just bought a fixer upper for $900,000 from the REO department at Wells Fargo bank. See the video for the rest of the story.
* The house has the original 1988 kitchen.
* The finished basement has mold that needs to be dealt with.
* The radon reading was 8.2 pcl, and needs to be handled with a remediation system.
* The master bath needs to be totally renovated and updated.
* The other seven full baths, and the two half baths need new toilets because the existing toilets are stained with iron from the old well. The house pulls from a new well, and it has a new Culligan water filtration system that gets rid of the iron in the water.
* The guest house by the pool needs a new toilet, and the interion needs to be painted.
* The house has a 2-car garage, plus a separate 3-car garage, with a car lift for working on cars.
* The library is paneled in stained and sealed oak.
* The ceilings on the main level, upper level, and lower level are ten feet high. The doors are eight feet high.
* The lot has 300' of navigavle waterfront, with a dock, a boat lift, and a 26' ski boat in the lift.
* The house has about 12,000 square feet of living space on the main and upper level; that doesn't count 4,000 square feet in the finished basement, or the guest house by the pool.
* There is a large, undulating putting green in the back yard, covered with a synthetic surface that simulates grass.
* Other homes in the neighborhood have sold for $5.5-$7 Million.
Frank has thoroughly evaluated the house. He estimates that the renovation will cost $360,000, and take eight weeks to complete. He will be $1.26 Million all in. According to the comps, he should be able to flip it for $6.25 Million.
Only in America can good thing like this happen to nice guys like Frank.
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