Flipping Our First House - Project 505 Burns Road
Updated: Jan 30, 2020
Getting Started Out of State
Today fixing and flipping properties is hotter than ever. With seasoned and novice investors all looking to find their next, or first deal, it can be tough to locate a house of your own to renovate due to fierce competition. Fierce may be an understatement!
We decided to spend our time looking out of state. Almost 2,000 miles away at that. Why? Well, because we’re a startup company, founded April of 2018, with limited financial resources. We’re based in the San Francisco Bay Area - One of the most expensive housing markets in the country. Homes in the Bay Area, including:
And public auctions
They are ridiculously overpriced! I remember finding a house in a small city called Lafayette that had such severe fire damage it had to be knocked down and rebuilt. The home still sold for over half a million dollars! Ridiculous...
We chose to look in Tennessee for one primary reason. I have family out there who own a property management business. They have been working in real estate for over 30 years and know Tennessee like the back of their hands. Not to mention, housing is far more affordable.
Our partnership with Stevens Realty is what enables us to operate effectively in the Tennessee markets. They have a strong presence in:
Locating 505 Burns Road in Knoxville, TN
Finding our first project, 505 Burns Rd, took a substantial amount of time browsing through the MLS. Every day we took time to browse the latest listings that hit the market. We would look at every new listing in:
And the surrounding areas within 30 miles
We were waiting for the right opportunity to show up. Weeks scrubbing the MLS felt like an eternity!
Submitting offers was non-stop. We had our agents placing offers left and right. At our peak, we were presenting 20 offers or more a week. Our agents were analyzing even more opportunities, well over 50 per week, and the majority of them we wound up not placing bids on.
A few common reasons we’d pass on an opportunity are:
The property is too old.
Too much work required.
The asking price was too high. We’ve since developed more strategies where we can offer sellers more money, which is a win/win for everyone!
We were analyzing and submitting so many offers with little success, that one of our agents got burnt out and no longer wished to work with us. I couldn’t blame them, after analyzing over 100 properties and submitting over 50 offers with no luck, their choice to walk away was justified.
Finally one day, 505 Burns Rd hit the market in East Knoxville. It was listed at $62,500. We submitted an offer for $55,000 and the next day our offer was accepted! Finally, after what seemed like an eternity of looking for our first project, we got an accepted offer. At that moment, our office was the happiest place on earth. We celebrated by taking a day off and enjoying some time on a company excursion to the beach. Woohoo!
The seller of the property had recently inherited it from her mother who, unfortunately, passed away. After years of dealing with tenants who had left the property a bit worse for wear, she wanted out. If you had smelt the dog urine on the floors, you’d want out too. We were happy to help the seller, who happened to be a real estate agent, get out from under the house.
Finding & Working With our Real Estate Agents
Since 505 Burns Rd was our first project, there were a few key people we needed to find in the Knoxville area:
A fantastic real estate agent or two
Top-notch contractors we could rely on
We found both during a three-month business trip Contenza took to Tennessee. We held up in Cookeville and made weekly trips into Knoxville and Chattanooga. It was an experience for sure!
Finding great agents to work with was a critical aspect for us. Since Contenza was remote to Knoxville and just getting started, building a reliable team was paramount. Currently, we are working with two agents in Knoxville. The first one, Corey, we found on Yelp. The second, Teresa, located us through one of her lead generation sources.
We spent plenty of time with them to make sure they were a good fit for us, and that we were a good fit for them. Many lunches, meetups, and house viewings later, we consider them an invaluable part of the team!
Both Teresa and Corey are great people to work with. If you find yourself buying a house from us, or selling a home to us in the Knoxville area, you’ll likely work with one of them.
Finding & Working With Contractors
We were quite fortunate when it came to locating contractors. Thanks to our partnership with Stevens Realty, we were able to connect with a fantastic contractor who has completed over 400 flips.
We were also able to connect with another great contractor via a referral from Teresa. We’ll almost always try referrals first before going out on our own to find someone entirely new. Unfortunately, the second contractor wound up threatening to put a lien on the property towards the end of the project, so, you know, that was fun to deal with.
One team of contractors were put on the interior of the house, and the other team the exterior. It took about two weeks after closing to get started, but once they did, they began to make significant progress. From start to finish, the entire renovation process took just over four months.
Scope of Work
505 Burns Rd had a lot that needed to be done. I’ll never forget the pungent smell of dog urine on the old carpets once you first walked in. Let’s go down the list of things we did to make the home shine again.
Remove old carpets and redo original hardwood floors
Open up some walls to offer a more spacious living room and kitchen
Level the floor in the kitchen and entryway to the master bedroom.
Fresh paint inside and out
Convert one of two rooms in the basement to a bedroom
Add a master bathroom to the master bedroom
Finish stairway to the basement
Reinforce concrete blocks on the backside of the house
Power wash and paint front porch area and siding
Build exterior railings
Hang new sheetrock throughout the house
Paint all the interior walls and trim
Replace all interior doors
Install all new modern stainless steel appliances
Install new ceiling fans and lighting fixtures
More things had to be done, but the above were the major points we focused on.
You’ll probably never buy a house to renovate and not run into unforeseen issues. With Burns, one of the most significant unexpected problems we ran into was some ancient plumbing work that was hidden behind a wall. I remember our main contractor pointing it out to me and saying:
“Don’t look at it or it’ll break.”
It looked like toothpicks placed together with tape and glue. Luckily, our crew was able to handle it promptly.
We also discovered there was a fire in the house! Fortunately, the damage wasn’t extensive. We had to replace some Sheetrock and 2x4’s to fix it up right.
The kitchen floor had a reasonably large grade in it. It had slumped down over three inches at some points. Originally we planned on using a self-leveling solution that magically levels out surfaces.
As we moved forward, it was determined that the best way to fix the floor was to tear it out and add a new, properly leveled one. It was a bit pricier, but it was the right way to do it.
Another small thing we ran into was the bathtub in the guest bathroom. Someone had added butterflies to the base and epoxied over them. Why? I’ll never know.
We’re still unsure if we’ll be able to get the butterflies out of the tub, but we’re confident we can. If not, the tub will have to be replaced, and that won’t be cheap. (Update: The butterflies were removed!)
Estimated Time Frame
Before any renovations began, it was estimated the entire project would take 3 - 4 weeks. That was a pretty aggressive estimate, but I remained optimistic. As demo work began and we got a clearer picture of what was behind the walls, the estimates shot up to 6 - 8 weeks. 6 - 8 weeks was a much more realistic estimate based on the scope of work, and so far we’re on track to hit that goal. (Update: It took over four months as mentioned above!)
At the end of the day, we would prefer the project take longer, and everything is done right, then to cut corners and get it done fast.
Our marketing strategy will be simple, yet effective. As soon as the front of the house is cleaned up and looking beautiful, our listing agent, Teresa, will begin taking photos for pre-marketing.
Our pre-marketing phase will begin two weeks before the house hits the market. We’ll also put a coming soon sign in the yard to attract anyone interested in a new home that may be driving by.
Once the two weeks coming soon period is up, the house will officially hit the open market. Our listing agent will:
Post professional photos
List on the MLS
List on Zillow and other real estate sites
Hold open houses (I think)
Contact her connections to see if they have any interested buyers
After the house hits the market, it’ll only be a matter of time until we get an offer we’d like to accept. From there we go to the closing table, and our first project, 505 Burns Rd, Knoxville, Tennessee, will be complete.
Below is a slide show showing some beautiful photos of the finished product. Take a look!
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Hopefully, you enjoyed walking through the process of buying, renovating, and selling a home with us. Contenza Properties takes great pride in the work we do, our ability to help homeowners, and the difference we’re striving to make by revitalizing forgotten homes.
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About the Author
Jordan Reid founded Contenza Properties in April of 2018 to help homeowners solve their real estate problems quickly.
Since then, Jordan has helped multiple homeowners facing difficult situations such as divorce, property liens, and unwanted property inheritance.
Jordan believes in putting people first, and numbers second, which helps him reach the best possible solutions for the homeowners he works with.