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CT Homes Case Study: When To Fluff and Buff

Written by JD Esajian

Join JD and Dan Wright from CT Homes as they break down their third case study on the FortuneBuilders Real Estate Investing Show. In this episode, JD and Dan focus on how they were able to acquire the property, what the rehab of the property involved, and how their hard work paid off with the sale of the property. Get a full breakdown of this recent CT Homes deal to learn how you can apply their successful strategies.

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CT Homes Case Study: When To Fluff and Buff

Hello, everyone, and welcome to the FortuneBuilders Real Estate Investing Show. Ladies and gentlemen, boys and girls, cats and dogs around the world. Welcome to another fantastic episode. I’m honored and privileged to be joined by none other than Dan Wright, Director of Acquisitions at CT Homes. Once again, another fantastic CT Homes case study coming at you live. Dan, you’re excited. I’m excited, especially knowing cats and dogs are watching around the world and locally. We have an action-packed, energetic, high speed, low speed, side speed, whatever you want to call it case study that we’re going to go over today.

Word of the Week

Before we get to that we got to go over the term of the week. It’s not the word of the week, because there are multiple words the term of the week is fluff and buff. Is that named after you and mean? We’re like Ren and Stimpy; fluff and buff. Now some of you’re thinking “Holy cow what kind of show you got for us today, JD?” It’s a good one. You’ll find out what that means, how we apply it to the case study we’re going over, and how it can potentially make you a lot of money if you look at your deals this way. You know what? Let’s get rocking.

Aqcuiring the Property

This house was listed on the MLS, and it was priced at $760,000. We did see it when we filtered every day because we go through every listing. It just so happened that it was listed by an agent that we had done a deal previously with about six months earlier. That agent did not send it to us. He didn’t seem like he felt like it wouldn’t be a fit for us at the time.

When we filtered it, it wasn’t initially. We also agreed that it wasn’t an obvious fit for us because of the general condition of it. Exactly. It was that in a moment, it was price, kind of close ARV. The condition wasn’t bad. We call the agent anyway. He did tell us “Yeah, I didn’t think of you guys on this one. I don’t think it’s for you. But I’ll keep you posted”. They did go into escrow with a traditional homeowner who was going to live there at $730,000, so they were $30,000 below list price.

We put it on the back burner and in the follow-up bucket. We worked on other deals. Three weeks later, he called us and he’s like, “Hey, do you guys remember that house on San Miguel on Dictionary Hill?” “We sure do”. He said the buyer got cold feet, something with their loan. Something happened. It was looking like it was going to cancel. The owner who’s in the military was relocating. He already moved out. Now he’s in a position that he has to sell. They don’t have time. That’s the motivation. He said the seller is looking for $730,000. Okay, let’s look at numbers.

We went to the property. As we mentioned, the word of the week is “fluff and buff”. We talk about that because this isn’t your standard: rip everything out, start over. This is: half of the house is nice. Let’s work with what we have so that we can hold it for less time and our scope of work is less. That we can get more. Then we can pay a little bit more for the property than if we had to do a full gut.

We went to the property. We analyzed it. We determined our budget was going to be in the 50k-60k ballpark. Normally it would be well over $100,000 for a home of this size. We told the agent we can pay $667,000. This agent is super cool. He wasn’t like “I’m gonna represent you and I want the re-list”. He didn’t care. He’s like “I want to get this sold. I want to get my seller as much as possible” which is an agent’s responsibility.

That was our deal. We were at $667,000 self-represented, meaning we brought in that two and a half percent commission which gave us an effective net purchase price of $650,000. If you go online and you see this property when we bought it (for those of you listening and watching) like Dan just mentioned, it closed (when we bought it) at 667, but our internal CT Homes effective purchase price is actually $650,000 because I, JD Esajian, represented CT Homes as the buyer, but I, JD Esajian, do not put the commission in my pocket.

In this case, it was 17k. We use it to reduce the effective purchase price. When we start the books in QuickBooks, our purchase price was 650. That’s a big chunk. That 17k can make or break a deal. The lesson there, for those of you listening and watching, cats and dogs, boys and girls, men and women, is that not every agent has to represent you as the buyer. Some care and some don’t care. You don’t know unless you ask. Don’t assume that the re-list or them representing you is always needed. There are two numbers that you can pay depending on that scenario. We’ve learned that over the years,

We gave him our number. We’re at $667,000. He was hoping it would be a little bit more and so did we; it is what it is. He went to the seller, and he’s like, “Hey, here’s a cash offer, as-is, closing next week, or if you want, we can go back on market”. It was November of last year, and things slow down around the holidays. That’s Luke’s birthday. Happy birthday. He turned five on that day. It’s a good day. It’s a great day.

Ultimately, the seller did decide he wanted the ease of the transaction and just be done with it, so they did take our price and we opened escrow. Another lesson there, ladies and gentlemen that are watching and listening, is that the price that someone has a property marketed for, in this case, the multiple listing service, what you can pay is usually not the same number. Even when your number of what you can pay is much different or much lower than what someone wants for the home, it doesn’t mean that they won’t accept your offer. If you never submit it, you don’t have a chance. You get the offer in and follow up.

A person’s motivation in this case: a military that has been relocated, escrow fell out, had to sell, didn’t want to go back on market, so the price wasn’t the most important thing to him. We don’t own the home now, but we did own the home, and you’re going to see the outcome of what we did, and our after repair value when we bought the home was $835,000.

When we have a fluff and buff scenario and we run comps for our ARV?, typically we’re looking at turnkey beautiful houses that have been completely redone. In this scenario, it’s a little trickier. You have to find comps that are in a similar condition. What is our fluff and buff going to look like? We did see higher comps in the high $800,000, some touching $900,000 that was fully renovated, so we knew that if we could scale it back, $835,000 made sense based on fluff and buff.

Had we done a full rehab, it would have been probably like $125,000 for the rehab. It didn’t make sense. Even if you could sell for $900,000, it still wouldn’t make sense because it’s a longer hold time. When you analyze properties like this, you have to take into account the neighborhood and the uniqueness of every house. Our house had big views.

When we looked at comps, some had no view. Some had really steep driveways, which are just nasty. You should drive around some time and see some of these driveways. They’re pretty gnarly. You need an off-road vehicle to get up your drive.

Interestingly enough, the gentleman that bought the home did have an off-road vehicle. He had a jeep. He liked the location because it was close to where he takes his Jeep on the trails. This particular driveway wasn’t as steep to where he needed a four-wheel drive to get in.

We’ve talked about the term of the week and Dan’s used it a couple of times: “fluff and buff”. What that means is doing the appropriate renovation for the house. Specifically in our office when we say fluff and buff, it doesn’t mean cutting corners. It doesn’t mean hiding something. It doesn’t mean the lipstick on the pig term that sometimes you may have heard.

“It means doing the right renovation for that home”

Some homes are in good enough condition that you don’t need to do everything. The bathrooms are salvageable. You can keep a lot of things as was the case here. The siding on the outside is very good. Maybe the kitchen doesn’t need everything.

It’s doing the right renovation, accounting for the numbers, and analyzing it that way. It’s generally doing less work (and sometimes a lot less work) to be able to get the deal and potentially sell it at a better price because it’s not completely renovated. Maybe you can round up more buyers because it’s more affordable. I think a big question a lot of viewers would say is how do I know When it’s a good time to flip then? That’s a great question. The answer is always to look at the comps. If you have comps that support that, then that’s what you do.

Renovation Plan

The renovation plan was the fluff and puff. That’s a reduced scope of work here. What we did is just what we needed to; not everything. We did put in a new kitchen because that’s a very important component of the house. We refreshed the bathrooms (which we’ll look at after photos here in a moment) and refreshing does not mean Fabreze, it means changing some things.

In these bathrooms we literally just fine-tuned some of the plumbing fixtures, meaning not changing them all. We put in new mirrors. We left the cabinetry. We did flooring. We did some repairs to the decking and painted the house inside and out. Actually, no, we power washed the outside and painted the inside. You’re gonna see the outcome of that in a second.

Fluff and buff, again, is a reduced scope of work that’s appropriate for the house. Our original budget was $55,000 and we actually ended up spending $65,000 at the end of the day with a little bit more decking repair and some other minor things that we calculated inside that we felt were appropriate. We had a one and a half month timeline for the project when we bought it, It took us an extra month. In the market that we’re in, it hasn’t hurt us.

Market prices have gone up, but we don’t want to be relying on that. It was the case here. It’s an adjusted scope of work from the standpoint of: we didn’t gut everything because it didn’t need everything and didn’t need to be gutted everywhere. Those timelines are great. Most of the time, we’re doing six months or eight months timelines. If you can make the same amount of profit in half the time and turn that money, then put it into the next property, that’s always a win.

Scope of Work

This is a good example and a great lesson for everyone listening and watching. If you do a full gut or full scope of work and bigger scope of work, you’re going to spend more and it’s going to take longer. Maybe you can sell the house for more (and you probably can), but if you can spend less on the work (not cut corners), take less to do less and spend less time to put it on the market at a more affordable price, then those two scenarios may result in the same net profit. Your return on investment is actually better in the faster scenario because you held it for less time. It’s a great way to analyze deals in your market. As Dan said, you really determine that on the back end by looking at comps.

So let’s see what we did on the inside. Well, obviously, we’re going to start on the outside. This is a good photo to highlight the slope of the street, but because of that, we have views. We didn’t do much on the outside other than fine-tune the landscaping, clean up what was there, and powerwash the exterior.

One of the things we’ve done over the years is built a very simple half trellis protruding out of the front of the house just above the garage. The front of the house has a very unique look to it. It’s got the garage door and then almost two stories of just flat wall with one tiny window. It kind of looks like the side of a house that you’d never really pay attention to, but it happens to be the front.

By putting that half trellis protruding out of the front of the house just above the garage, it breaks up that plane and it’s a long space. If I had to guess it’s maybe 22 feet proximately of just sided wall. It gives you dimension. It gives you texture. It changes the aesthetic of the front of the house. It’s an inexpensive way to give it a quick curb appeal pop. We do that a lot depending on the balance of the home. I use the word unique, some might say ugly land or blind or plain, but it’s unique.

If you focus on the right $500 unique addition, you can turn the home into something that has a lot more curb appeal as we did here. You can see how now the house is clean, we’re gonna get inside and stage it. It is showcased way differently now. We didn’t build that deck. It was there. We had to spend a little extra on the wood repair because it’s a big deck and a lot of wood and we wanted to make sure that it was done properly because, in our opinion, it is the best feature of the house.

Now this picture (for those of you that are watching) showcases what’s really special about this home on San Miguel. It’s a dramatic expansive view of the still water reservoir. You’re overlooking Spring Valley. You can see the ocean and off in the distance is Mexico. It’s a badass shot. It is pretty good. That’s what someone’s buying. They’re not buying the $500 trellis that we put in front of the house because they have to have that, they’re buying the view, the openness, the outdoor space. That’s what makes San Diego special

An ocean view for under $900,000 and a 2000-square-foot house. That’s unexpected. The first time I walked in there I was like “Oh my gosh, you can see the ocean”. It was jaw-dropping. Our median price point in San Diego now (for all inventory attached and detached) as of last week was $850,000. That’s a big number. Depending on where you’re listening or watching from, that might sound crazy to you, and it might be depending on where you live.

For San Diego, our median (again, half sell above, half so below that) number is $850,000 It’s hard frankly to buy a nicely renovated or turnkey move-in-ready home for $800,000. It is hard to even in further east county. You’re going to have to do some work. You’re Going to have to do a lot of work. This home provided a lot. It is literally right at around the median price point. Let’s go ahead and get inside.

That deck is cool. It’s got that mountain. You almost feel like you’re in Idlewild which is a community east of here that has really cool mountain homes kind of situated amongst trees. You can get eucalyptus trees around this property. This photo showcases that. You can see we took a lot of outside photos because, again, that is going to be the best feature of this home.

In the inside, there is new flooring you can see that makes a big difference. This is a vaulted ceiling living room. You’ve got a lot of space. You got a fireplace. This is a great room and you can see what staging does to the home. Staging makes an empty renovated house a home. This showcases that. You got color. You got texture. You got the new flooring.

We did $65,000 worth of work but the reality is we left a lot of the things that were there. We did put in a new kitchen and I’ll show you that here in a moment. Staging is a lesson. Some investors don’t want to spend the money on staging and sometimes you can get by with that on a full renovation because all the finishes are gorgeous. I have to say when you do a fluff and buff it is always dangerous because it’ll take your eye off the things that weren’t modernized and it gives it the feel that it’s completely renovated. Over 100% of the time every single one of our homes we staged, whether it’s a full renovation, whether it was a fluff and buff like we’re looking at here, staging makes a house a home.

We did put in a new kitchen here. You can see the white shaker cabinets and the crystal white quartz that we put in. Again, kitchens and baths sell homes. So if you’re going to spend money on a kitchen, sometimes you have to change the kitchen because it’s wrecked or there isn’t one there. In this particular home we probably could have gotten by with leaving the kitchen. We were borderline leaving it.

I think that’s why our budget changed as we decided we looked at comps again. We decided as a team if we spend a few more bucks on the kitchen, we’ll get it back and more. That ended up being a reality as we look at the sales. We kept the wine fridge, but if you’re paying attention, we relocated it, because it used to be next to the sink. But because we remodeled the kitchen, we made it more functional and put in a bigger sink.

That isn’t a new wine fridge in this picture. For those of you that aren’t watching, there’s a picture of the kitchen looking out over the view. There’s a wine fridge in the peninsula. That’s the same wine fridge that was in the home when we bought it, obviously we cleaned it up but it’s in great shape. So we save money there, 200 bucks, 250 bucks, depending on what size you buy. Now, lots of good lessons here.

Selling the Property

So let’s talk about the sales process, Dan, and bring this miraculous or awesome case study to a close sales system, ladies and gentlemen. All right, so we listed the home on March 24 of the Year 2020. We did list the home at $799,000. Now, for those of you paying attention, you might remember that we had a different after repair value when we bought the home. So did the value go down? Did we miss the mark on the ARV? Or, did we decide to price it competitively aggressively on the affordability side strategic strategically got so many good adjectives to get more people interested in looking at it? Even in a competitive market? Like we’ve been in San Diego with low inventory?

The answer is the latter. We listed it. That’s a good threshold. Right? We had an A 35 ARV. But do you list it there? Do you not? It really depends on your market and you can test these different things and what’s working really well. This is a good lesson for everyone listening and watching really well, not just in San Diego, but as pricing it, at a more competitive lower number, strategically, in this case, 799 to get hopefully more interest. We’ve tested it both ways. And that’s working.

It goes back to knowing your market. You mentioned in San Diego that the median price point for the county is 850. You need to know what’s the median price point for your zip code as well. When we look at Spring Valley, when we went to list it, it was 720. But you also need to know what the average size of the house is there. So the average size house in Spring Valley is 1600 square feet. We were a little over 2000 square feet. We have offered more square footage. And at the 720.

Half those houses are updated, and half are not. So again, when we decide on a list price, if we can have a seven in front of it, the median price point also has a seven in front of it. So, psychologically, it makes more sense to bring it on at that number, knowing it’s gonna go over, and just comparing it to the overall county median price, we’re way more affordable.

Absolutely. Some might be thinking, “Well, if you price it lower, are you risking the chance of getting offers at a lower number below what the value is?” of course, the answer to that question is yes, but buyers with agents that are knowledgeable and know the market will flush themselves out and produce a proper offer for the value of the home. If not, and they offer below, the home is really worse than that word that can really tell some tell you something about the agent that’s representing the buyer and what you may or may not want to do in terms of making a decision to counter those buyers.

We had two open houses. Obviously for a lot of time, recently open houses weren’t being used because of COVID and whatnot. But I think now if you’re able to do them in your marketplace, they always help. Again, not every home in fact, most don’t sell through an open house. But any chance you can get more people into a home the better. We had two open houses. We received our first offer on March 25 of this same year 2022 after it was listed, I was going to ask you if you’re good at math and remember the day we listed it for there’s one day difference.

So we got an offer quickly, which was the goal of the list price. the initial offer that we received was $885,000. So wow, right out of the gate higher than our ARV. That’s a function of a lot of things. It’s a great listing that we’ll look at here in a second, great photos, great staging. Obviously, market dynamics have a play in that too. We have very low inventory in San Diego, that may be the case for you as well in your marketplace.

But the marketplace told us that they want this home, where they wanted the home, it was attractive. And part of that, of course, was the work that we did and the pricing strategy. We ended up accepting a price of that same initial offer.

Can you read that accepted price offer, Dan? $905,000. I didn’t study physics, and I’m not a math whiz, but what’s the difference between the initial offer price and the offer accepted price? $20,000. So just because someone offers a great price that’s a good start, as well. If you feel confident in your marketplace and your buyer is qualified for more, you’re checking your inventory. There are a lot of things that can help you formulate how you counter and what number you get to.

We felt that we could easily compete with homes that were 100% renovated for the reasons Dan mentioned. We have more square footage. We have amazing views in this home and also, I knew something about the buyer, just like you were talking about the seller. I’ve mentioned it a couple of times. Because I asked the agent when I called from the offer that they wrote it at five, absolutely loves his location, right around the corner from the Jeep trails. He’s a Jeep owner, right? I’ve never met the gentleman, personally, although Michelle or Angel did when they went to the home inspection, I knew that it checked a lot of boxes for him because I asked those questions. So let me ask you a question about knowing more about the buyer. And the fact that the home that we’re trying to sell checks a lot of their boxes, do you feel less or more confident countering and a stronger number way calmer, way more confident? Ding, ding, ding, ding, ding. Good answer, Dan. We had one day on the market and saw that.

Escrow Time

It’s unbeatable one day on the market. Our total escrow time, ladies and gentlemen, cats and dogs, boys and girls listening and watching around the world, meaning from when we opened escrow to when we sold it, was 14 days. Now some of you might be thinking, well, it’s got to be a cash offer. Actually, that’s not the case here. They had financing. So cash financing, is obviously two different ways to buy homes.

There are advantages and disadvantages to all of them. To us, as the seller, it’s cash to us at the end of the day, in a way. If we can feel super confident as I did, because I negotiated this sale with the buyer finance, pre-approved, talk to the lender and do all that quickly, don’t tell me you can’t close home in less than 30 days or less than 21 days. As the quarter has started for us, Q2 here, I’m going to give you four numbers 14, 14, 13, and 14. Those are four numbers. Do you have any idea what those represent?

Well, since we’re talking about total escrow, yes, I’m going to just probably say that was probably some quick finance closings. Yeah, so the first four sales that we’ve had on Missouri, San Miguel, Oak Glen, and Loma Valley closed escrow time: 14, 14, 13, and 14.

That’s very impressive. That’s called crushing it ladies and gentlemen. That’s not unique or just because I’m JD or we’re CT Homes, or this is Dan Wright. We’ve been doing this a long time. It’s education. It’s listening to training like this. It’s getting more information at It’s understanding your market. It’s being confident in your negotiation. It’s a lot of different things. It’s being prepared when you go to sell a home.


The biggest lesson of this case study, ladies and gentlemen, boys and girls, cats and dogs is that not every home needs to be completely gutted. This is a prime example of that. Sometimes you can make more money when you do that, and that’s why we wanted to bring this case study. It’s super recent, super fresh. Super awesome.

Dan, thank you once again for joining us on this. Thank you for this case study episode four or five or three or four. I’m forgetting now, but we’re gonna bring these to you more frequently once a month. It has been about a month I think since we did a case study. I want to thank all of you for watching and listening.

Give us some comments below the show. Tell us what you want to learn more about or hear more about. Like us. Subscribe. Share with friends and family. Boys and girls, cats and dogs all that good stuff. In all sincerity, we really appreciate everyone listening and watching. We really enjoy doing these episodes. And we really look forward to seeing you on the next podcast. So catch you then.