Roberta Knab Rehab Deal

Rehab Details

Property City: Huntsville
Property State: AL
Purchase Price: $114,000
Repair Costs $137,053
Holding Costs: $1,701
Sale Price: $315,000

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Case Study

How did you find and structure the financing of this deal?

We drove through the historic area of Huntsville prospecting, documenting properties for sale as well as looking for abandoned/vacant properties. We had our Realtor contact the listing agent. We negotiated with the seller and got the property for $25,900 less than asking price, we paid zero closing costs, and we had the seller remove all of the junk/debris from the house. We used a private money lender for the purchase price, private money lender for 50% of renovation costs, and I funded the remaining renovation costs.

Provide a summary of the repairs and improvements you made to the property.

The house had to be completely gutted to the studs. Everything had to be replaced – installed piers to level front of house, new electrical and plumbing throughout which included new sewer line to the street, complete HVAC system and duct work; and exhaust duct work for range hood. Installed gas line for range, moved gas line to install tankless water heater in new laundry room. Fully insulated attic and walls. Moved and installed new attic access (pulldown). New wood floors in kitchen area, master suite and hallway. Restored original wood floors in LR, DR, 2 front bedrooms and hallway. Opened up walls and reconfigured space from LR to DR, DR to kitchen, added a laundry room and hallway entrance to Master suite. Enlarged and reconfigured kitchen, installed custom cabinets and granite, large island with wine refrigerator and new appliances, backsplash with custom tile and chimney range hood. Modified master bath and closet space (new closet space 10’x10’) to enlarge the bathroom to accommodate 60”x48” shower with full length seat, including custom tile and glass doors, and Vessel tub. The master bath is outfitted with custom cabinets and linen closet, granite countertops with undermounted sinks and custom mirrors. To save wall space we installed a pocket door between the bathroom and closet; and we installed a barn door as entry from master bedroom to bathroom. The full bath between the 2 front bedrooms has all new pipes, new sub floor to support the black and white tile, custom cabinet and granite, matching sink/shower faucets, custom mirror, lighting, and towel bar accessories. The 3rd bedroom had no closet so we removed the hot water heater, opened up the wall between DR and bedroom and we created a closet that is the full length of the wall, new closet is 12’x2’. We had custom bi-fold doors made to match the Craftsman 3 panel doors; the wood floor installer made a new closet floor to match the original floors by cutting the Oak to match the 1.5” width of original floors. Custom thresholds were made to create a clean transition from wood to tile. In keeping with the Craftsman Bungalow style, we installed custom Craftsman 3 panel doors, new trim and baseboards. New light fixtures and ceiling fans throughout. Installed vinyl siding and soffits, replaced gutters and downspouts, replaced faux shutters, replaced front porch supports with Craftsman columns. Moved windows and doors to reconfigured spaces. Complete landscaping makeover, including removal of 5 extremely large trees in the back and built Privacy fence. Removed overgrown trees and bushes in the front. Installed French drain system. Added concrete patio outside master suite connecting to detached garage with parking pad. Installed garage door opener.

How did you find a buyer for the property if you sold it?

Realtor listing on MLS and Zillow. The house was on the market for 12 days. The Zillow response was fantastic, however, we didn’t have any showings. We held two Open House events; the 2nd Open House had a good turnout. With no showings, we realized our Realtor overpriced the house. We met with another Realtor who helped us reprice the house, and within 18 hours of changing the price we had 2 offers. We accepted a full price offer with no contingencies or request for closing costs, and buyer had pre-approval letter from 2 banks.

What are some of the major lessons learned that you would like to share with other students that they can learn from?

Our general contractor turned out to be the absolute worst GC ever. Initially, the project seemed to be organized. After the first few weeks, we realized that the subcontractors had not been notified of their start date for their project work, there was no coordination or timing of materials and/or the subcontractors, the scope of work was not being followed, the work space was always a mess and we had to be there every day to stay on top of things. The “rules” were not being adhered to and the general contractors’ workers were rude and disrespectful to the subcontractors performing their work. Our wood floor installer walked off the job twice because the general contractors’ workers were in his way; the general contractors’ workers were unreliable which impacted the other subcontractor’s ability to get their work done. In order to protect our investment and to finish the project, we took over managing the subcontractors and the work effort. Even though we couldn’t terminate our GC, we managed the project, purchased the materials, managed timing and coordination, managed invoicing from subcontractors and remitted payment; We kept the work area clean, constantly removing construction debris and garbage, we did most of the prep work in the yard to save money, we returned unused materials, we had to return damaged materials and buy new, etc. – the list is endless. There were SO many stressful situations, challenges and hair raising problems to overcome, and my son and I took our frustrations out on each other, which is never good. We never ended a conversation with anger but we were yelling at each other almost every day. We took the time to work through the issues, we apologized to one another on a daily basis, but we had to figure out how to work together and not allow the “junk of the day” to negatively impact the project or our relationship. We worked hard to control our tempers/frustrations and to always treat one another with respect. At the job site, we were always composed no matter what the situation was with the general contractor, but we weren’t very nice to one another. INVALUABLE Lessons learned. With all of the challenges, aggravations, delays, and the work that had to be redone 2 and 3 times, and dealing with contractors that lacked integrity and work ethics, no accountability/responsibility, and total disrespect for others, we wouldn’t trade this experience for anything in the world. Managing the subcontractors gave us the opportunity to create strong, lasting relationships with them. The subs have told us that they want to work with us on future projects. Several subs have given us pocket listings including introducing us to the sellers. This project taught us so much about ourselves and our ability to endure any situation; to prepare for any unknown. The education and lessons learned will be with us forever and our future projects will reap the benefits of our experiences.

Shout Outs & Testimonials

Shout out and huge thank you to Jamie Saunders for her guidance and support as we worked through so many ups and downs with this project. BIG thank you to Than, Paul, JD, and Konrad, and the entire FortuneBuilders family for creating the tools, systems, and processes, and for providing access to a phenomenal group of field experts and support teams. We are so thankful for the support and guidance from so many Mastery students that we’ve engaged with this year. Truly an AMAZING group of people with so much to share. We are very grateful for everyone that has helped make this a successful year!

Before & After Photos