The Shell House Breakdown

(House #4)

One morning I noticed a “for sale” sign in the Shell House yard as we drove to The Palace to work on the renovations there. We were already under contract on the Miller House but I know value when I see it!

I called the listing company and my realtor to find out as much as I could.

I wanted to complete a walk through as soon as possible…. Technically the listing wasn’t live yet.

There were a few nervous hours of waiting, and then we were able to get access!!

We were the first ones in. Our contractor was conveniently helping at The Palace that day and stopped by to check it out with us. Afterwards, I decided we should put in an offer. I called up Josh to talk through my thoughts.

After a quick conversation we were full steam ahead!

The house was originally listed for $60k. Our offer was $80k. No inspections, no contingencies, cash close.

We put it under contract that afternoon (we were in multiples) and our agent later told us that there were angry investors since the listing agent didn’t wait the weekend to get more offers than the ones that had come in that day.

Things. Move. Fast!

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Josh hadn’t seen the house and took my word for it… this was quickly becoming a trend as he had yet to see the Miller house at this point. He didn’t walk through until after we closed.

I think he was a little skeptical, and definitely less enamored than I was.

I knew that deep down under the grime and stink was a beautiful gem waiting to be uncovered!! But boy, was she stinky. Apparently the previous owners had many many pets and the neighbors couldn’t leave their windows open because the pet smell was so pungent. Yikes!

Highlights:

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Josh laid all the floors throughout the Shell House himself. I’m so dang proud!!

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This was a house full of projects. It has definitely earned a special place in my heart! We listed it for rent at the end June anticipating that it would be rented starting August 1st.

We knew it would show well and we had multiple interested, qualified, prospective tenants.

Surprisingly we were able to place a tenant for a quick July 1st move in, so we had virtually no vacancy from the time of renovation to the property being rented. Our tenant signed a 2 year lease which was a great feeling!!

We then prepped for our appraisal. The appraiser was backed up by about a week, so he wasn’t able to come though until July 2nd.

We wanted our appraisal to come in above $200k. I guessed it would be $225k. Josh guessed $210k-$215. He was right!

Shell House Numbers

Purchase price: $80k
Reno + holding + repairs: $81.6k
ARV: $211k
Cash left in deal: ~$3,400

Vacant + under construction: 3 + 5 months
Time from purchase to refi: 9 months (#COVID)

The Shell House project took slightly longer than I anticipated. I thought we would be finished in the beginning of May, but things slowed down once COVID hit. My original ballpark budget was $70-$75k. I’m happy with where we landed… Obviously there is room for improvement but we are learning, and that is priceless.

We didn’t begin construction until 3 months after purchase. This was planned! We had our hands full with The Palace and getting the Miller House rent ready.

When we put this property under contract we knew it was a deal that we wanted to do and our numbers worked. It was worth it to us to hold it for a few months until we began renovations. Deals don’t come up every day so we were happy to have it waiting for us to renovate as we finished the other two up.

It’s easy to look back and think about the different ways things could be done, and this is useful when looking to improve your results going forward. At the end of the day it was close to a perfect BRRRR and we kept our momentum rolling!! I’ll take it!

Next up:

Big Red + The Oz House. Because clearly we operate best with the pressure from to-be-renovated-houses waiting on deck haha.