41627 Madrone St. Springfield Oregon Investment Property
Purchase Price: $187,000
Sales Price: $334,900
Potential Profit: $147,000
Rehab Cost: $75,000
Realtor Fees: 16,745
Actual Profit: 55,255
Project Overview: The project was purchased and completed by Robert Grand of Grand Realty in Eugene OR and Shelly Kane of Moxie Design in Eugene OR. This home was brought to us by a seller looking to just list it in MLS. After looking at the home we recognized that it wasn’t fit for MLS. Meaning it would be a cash only or rehab loan purchase. Our original budget for the project was 35k to 45k. This project is considered to be a full-scale rehab project. We purchased the home for cash at $187,000.
During the demolition phase of the home, we came across extensive dry rot in the kitchen area. We had to pause for 2-3 weeks in order to get permits at that point to ensure all the repair work was permitted and signed off by the county.
The only other big problem we ran into was a poor septic system. We ended up completely replacing that before the home was sold. The rest of the project was straightforward. We split a single bathroom into 2 bathrooms giving the master bathroom its own bath. We gave the whole house a facelift. New paint, floors, and trim throughout.
Overall we still made a good profit on this project but it wasn’t done without issues. We had a healthy safety margin on this project in order to maintain our profit margin.
- When making a cash as is purchase, spending more time on the due diligence of the repairs is wise. As you can see from the stats above our rehab costs doubled due to not checking into the septic and extensive dry rot in the kitchen.
- If you are tearing into a floor, get a permit early. We failed to recognize how much slower the county was at issuing a permit vs the city that we normally work in.
- Contractors work on timelines. When your timelines get out of whack they end up moving on to another project. It smart to have a backup contractor in order to stick to your time frames. This project ran 6 weeks over the projection due to the permits and contractor delays.