33 Riverview St.
North Andover, MA
How to flip a property
with a challenging
location.
Shaun M. Reilly
Shaun@rre-homes.com...
Alternate Title

“How to Flip a PO$”

Copyright - Reilly Real Estate, LLC
Who Am I?
 Raised

in Dracut, MA
 Graduated from Boston University 2000
–

Bachelors in Math and Chemistry and Physics M...
Challenging Location?
 What

makes a challenging location?

Copyright - Reilly Real Estate, LLC
Nice Neighbors

Copyright - Reilly Real Estate, LLC
Challenging Location?
 What
–
–
–
–
–

makes a challenging location?

Being across the street from a sewer pumping statio...
How did I find this gem?
 Looking

at properties late at night and came
across this place on auction.com.
 It was ~11:30...
How did I find this gem?
 Their

were no other offers!
 Talked to my contractor to come walk it on
Monday before I had t...
Scope of work:

Removed possible copyrighted image of a pig with lipstick

Copyright - Reilly Real Estate, LLC
DON’T over rehab!!!!!!
 Resale

value is limited.
 Do what you need to do and make it attractive.
 High end finishes wi...
Before:

Copyright - Reilly Real Estate, LLC
After:

Copyright - Reilly Real Estate, LLC
Heating System Before:

Copyright - Reilly Real Estate, LLC
Heating System After:

Copyright - Reilly Real Estate, LLC
Marketing Strategy
 Price
–

it right!

It was a terrible location and needed to be priced for
that accordingly.
 ~$100K...
How did we sell?
 Got

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

1st fell t...
Financials:
Expense:
Buy Price
Settlement Fees (BUY)
Construction
Interest
Taxes
Insurance
Utilities
Miscellaneous
Commiss...
Summary:
Flipping challenging properties
1)

Buy right!
–

1)
2)
3)

Cheapest MLS sale since August 1994

Do not over reha...
Two Kinds of Real Estate Investors

1.

Those that make a ton of money

2.

Those that give up too soon

Copyright - Reill...
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Presentation given at the Boston Area REIA on 10-17-13.
This presentation was a case study on how to flip a property in a terrible location.
Sewer Plants, train tracks and being in the flight path of the airport were all issues that were overcome!

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  • Greater Lawrence Sanitation District
    MBTA
  • 33 riverview st ss

    1. 1. 33 Riverview St. North Andover, MA How to flip a property with a challenging location. Shaun M. Reilly Shaun@rre-homes.com Copyright - Reilly Real Estate, LLC
    2. 2. Alternate Title “How to Flip a PO$” Copyright - Reilly Real Estate, LLC
    3. 3. 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 Copyright - Reilly Real Estate, LLC
    4. 4. Challenging Location?  What makes a challenging location? Copyright - Reilly Real Estate, LLC
    5. 5. Nice Neighbors Copyright - Reilly Real Estate, LLC
    6. 6. 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. Copyright - Reilly Real Estate, LLC
    7. 7. 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  No – would not have anyway. bids and the opening bid was $63,500. Listed on MLS at $109,900. Copyright - Reilly Real Estate, LLC
    8. 8. 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. Copyright - Reilly Real Estate, LLC
    9. 9. Scope of work: Removed possible copyrighted image of a pig with lipstick Copyright - Reilly Real Estate, LLC
    10. 10. 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. Copyright - Reilly Real Estate, LLC
    11. 11. Before: Copyright - Reilly Real Estate, LLC
    12. 12. After: Copyright - Reilly Real Estate, LLC
    13. 13. Heating System Before: Copyright - Reilly Real Estate, LLC
    14. 14. Heating System After: Copyright - Reilly Real Estate, LLC
    15. 15. 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. Copyright - Reilly Real Estate, LLC
    16. 16. 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 Copyright - Reilly Real Estate, LLC
    17. 17. Financials: Expense: Buy Price Settlement Fees (BUY) Construction Interest Taxes Insurance Utilities Miscellaneous Commissions Settlement Fees (SELL) Income: $66,150.00 $9,637.42 $33,148.13 $4,300.11 $1,766.63 $639.55 $915.05 $217.50 $7,850.00 $3,430.04 Seller Agent Commission Sale Price TOTAL INCOME: $2,747.50 $159,000.00 $161,747.50 Buyer had a $2,000 Credit Commission was 5.0% on Net $157,000 TOTAL EXPENSES: $128,054.43 Gross Profit: $33,693.07 Copyright - Reilly Real Estate, LLC
    18. 18. Summary: Flipping challenging properties 1) Buy right! – 1) 2) 3) Cheapest MLS sale since August 1994 Do not over rehab. Know your exit strategy to sell. Work with any reasonable offer, you never know when you will get another one. Copyright - Reilly Real Estate, LLC
    19. 19. Two Kinds of Real Estate Investors 1. Those that make a ton of money 2. Those that give up too soon Copyright - Reilly Real Estate, LLC
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