33 riverview st ss

Copyright - Reilly Real Estate, LLC

33 Riverview St.North Andover, MA

How to flip a property with a challenging

location.

Shaun M. [email protected]


Alternate Title

“How to Flip a PO$”


Who Am I?

Raised in Dracut, MA Graduated from Boston University 2000

– Bachelors in Math and Chemistry and Physics Minor Graduated from Boston College 2007

– MBA with focus on Operations and Finance– MSF (Master of Finance)

Started in real estate March 2007 Full time since Jan 2010

Challenging Location?

What makes a challenging location?



Nice Neighbors

Challenging Location?

What makes a challenging location?

– Being across the street from a sewer pumping station.– Train Tracks running through back yard.– In flight path of municipal airport. – Near several other industrial buildings.– Right by the Lawrence border.


How did I find this gem?

Looking at properties late at night and came across this place on auction.com.

It was ~11:30PM on a Sat night, auction ended on Sunday morning.– Was not going to be able to visit property.

Probably would not have anyway.

No bids and the opening bid was $63,500.– Listed on MLS at $109,900.


How did I find this gem?

Their were no other offers! Talked to my contractor to come walk it on

Monday before I had to wire in funds. Figured it would have a lot of work since ARV

should have been ~$250K.– Once we saw the location took about $100K off.– However was in MUCH better shape than

anticipated.


Scope of work:


Removed possible copyrighted image of a pig with lipstick

DON’T over rehab!!!!!!

Resale value is limited. Do what you need to do and make it attractive. High end finishes will not make you more

money, and probably won’t sell it any faster.– Even with granite counters it is still across the street

from the sewer plant.

You need to find that “Special” buyer for this.



Before:


After:


Heating System Before:


Heating System After:


Marketing Strategy

Price it right!– It was a terrible location and needed to be priced for

that accordingly. ~$100K less than similar un-rehabbed homes.

Similar priced houses in town were uninhabitable REOs and Short Sales.– One suggested bringing a mask to help with the smell.


How did we sell?

Got LOTS of requests at that price point Over 50 showings with 68 DOM 2 Offers on it

– 1st fell through at inspection

Only sold for $900 under list price– Did give a $2,000 credit and did some repairs


Financials:

Expense:Buy Price $66,150.00 Settlement Fees (BUY) $9,637.42 Construction $33,148.13 Interest $4,300.11 Taxes $1,766.63 Insurance $639.55 Utilities $915.05 Miscellaneous $217.50 Commissions $7,850.00 Settlement Fees (SELL) $3,430.04 TOTAL EXPENSES: $128,054.43

Income:Seller Agent Commission $2,747.50 Sale Price $159,000.00 TOTAL INCOME: $161,747.50

Gross Profit: $33,693.07

Buyer had a $2,000 Credit

Commission was 5.0% on Net $157,000


Summary:Flipping challenging properties

1) Buy right!– Cheapest MLS sale since August 1994

2) Do not over rehab.

3) Know your exit strategy to sell.

4) Work with any reasonable offer, you never know when you will get another one.


Two Kinds of Real Estate Investors

1. Those that make a ton of money

2. Those that give up too soon

33 riverview st ss

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