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Marcy Case Study #4 – Closing On The Deal and Demo Day!

by Brandon · 8 comments

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This article is part four in an ongoing case study happening in real-time. You can find part one here, part two (with photos) here, and part three here.

It’s official – I’ve closed on Marcy.

It’s officially mine.

Well, ours.

If you’ll recall, I looked at several different options for what to do with the most recent acquisition to my investment portfolio. I eventually decided to add a good friend and partner to the deal, Bob. This was easy to do, since I included an “and/or assigns” clause in the deal which allows me to add or change the person who is buying the property without the permission of the seller.

The title company took care of the rest. They emailed me several times asking a few questions (such as who I would be using for insurance, the name and address of my partner, and other small details). I love how easy Title and Escrow Companies make the process. Essentially, they handle the entire sale and the seller and buyer never actually meet (usually). In some states, attorneys do the same work so be sure to check out how your state does things.
Meanwhile, I arranged financing through my private lender who lent $60,000 at 12% interest on the deal. He wired the $60,000.00 over to the title company, who then called and scheduled a time for my partner and I to sign documents.

Total closing costs for the deal ended up being $1372.57 but since we had already paid $1000.00 in earnest money when I submitted the deal, we needed to come to closing with just 372.57. If you look back on my figures from the first post in this series on the Marcy Street Case Study, you’ll see that it’s actually very close to what I had budgeted (I’m actually $100+ under budget – always a good thing!) Be careful, however, not to assume your costs will be the same. Remember I didn’t use a traditional lender – who often have thousands of dollars in charges.

My partner and I opened up a joint checking account as well, where he will be placing the funds needed for the remodel. In order to keep finances simple, I will be using checks for every purchase on this property, as following where the money goes is as easy as looking at a check register. I know there are much fancier ways to do this – but I’ve found that using checks is the easiest system to actually follow.

Day One – Demo

The deal closed late Wednesday afternoon, so the first workday started Thursday afternoon. Remember the photos from earlier? The house was filled with a large amount of … crap. Not literally, of course, but plenty of chairs, couches, tables, televisions, and shelving. My crew started work on hauling truck loads to the dump.

Often times it is most efficient to pay for a large dumpster to be brought to the job site – but in this case I opted instead to just have my crew make multiple trips. There was very little room for a dumpster to be brought here, and city code would have required a permit IF they even allowed me to place it. I guess we’ll see if I regret that decision later!

A Pleasant Surprise

One of my favorite parts of remodeling homes is finding hidden treasures. In one home I remodeled several years back, I found a young girls diary from the mid 1920’s- complete with newspaper clippings, a list of “favorite boys,” and dozens of “wise cracks.” (I also found hundreds of adult magazines from the 70’s in that same home).

No diary in this home, (yet) but we did discover something almost as cool – hardwood floors.

While in fairly good condition, the floors have a good amount of paint around the outside. There may also be an issue with getting rid of the smell. Now that the carpet is out – the smell has lingered. The easiest way to cover a smell, however, is to simply paint over all the floors with oil-based primer. Obviously, I cannot do this if I want to refinish those floors (and oh, how I would love to!)
So, the jury is out on that one. For now, I’ll have my crew clean the floors with bleach and see if the smell dissipates. I got an estimate from my flooring guy on refinishing the floors, and he said he would do it for $1000.00. This would be half of my flooring budget, which would put me slightly over on flooring costs. Refinished hardwoods sure would be nice, though.

Upcoming Adventures in Flipping

Meanwhile, my painting guy is out of town so I’ve contacted several others to see who can get in there and keep it within my budget. As of Friday night, the home interior is empty, all the shelving and other oddities have been removed, and the home is about ready to be put back together.

This week my crew will focus on finishing taking loads to the dump (The exterior still is in need – especially the dilapidated greenhouse out back) as well as prepping the walls for paint. Additionally, I hope to have the bathroom put back together this week – with a new tub-surround, flooring, vanity, and toilet.

I’ll keep you updated as the home progresses!

As always, please let me know in the comments below if you have any questions, comments, or suggestions!


About Brandon

has written 199 Awesome posts in this blog.

Brandon Turner (G+) is the Senior Editor and Community Director and owner of He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold), Entrepreneur, World Traveler, Third-Person Speaker, and Husband. Come hang out with him on Twitter!

P.S. looking for hard money loans in California? Be sure to check out my friends over at They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

P.S. Looking for more real estate investing knowledge? If you are interested in a top-notch course to help you understand the nuts and bolts of creative real estate investing, I would like to recommend Ben Leybovich's Cash Flow Freedom University. Ben is a close friend and has been my trusted adviser for years. He's a smart guy and CFFU is pretty awesome. The course is waitlisted, but while you wait for an opening Ben will send you tons of FREE content. Seriously. Click here to check it out.

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{ 8 comments… read them below or add one }

Remi Hudson September 16, 2012 at 5:12 pm

Awesome I actually found a property that’s in a fairly quiet neighborhood and I hope I’m able to close on it. Basically I figured out what my niche will be in real estate. I plan to focus more on Hybrid Fix-N-Hold for Single Family Homes and rent them out while building equity. Still in my twenties I’m finally diving in.


Brandon September 20, 2012 at 4:26 am

I like the hybrid fix-and-flip thing a lot. It’s a good way to build some good equity quickly!


Boone September 17, 2012 at 3:36 am

Mystery smells can often be sewer gas that is getting into the home somehow. A plumber or drain cleaner can use a smoke machine to check for such problems. Let me know when you figure out what your smell is coming from. Good Luck!


Brandon September 20, 2012 at 12:51 am

This is true, Boone. However, the smell is pretty blatant “cat urine.” It’s sad that I know exactly what this smell is. I’ve heard stories of just how disgusting the guy who lived there was during the last few years. However, now that the carpet is gone, the smell is 90% gone too. With some bleach and oil primer, it should smell good as new! I’ll keep you updated!


Nate September 17, 2012 at 2:47 pm

Damn that is a cheap closing! Does your lender ask for any points to get this financing?? You definitely need to keep up that relationship. The hard money lenders in my area all ask for 3 points and that really adds up over the course of a few deals!


Brandon September 20, 2012 at 12:53 am

It was very cheap! Usually, hard money lenders charge between 3-10 points (3-10%) and regular lenders charge at least a few thousand. However, this is “private money” and built from years of good relationships – so there were no points.


Joe September 17, 2012 at 6:10 pm

great work, brandon.


Brandon September 20, 2012 at 12:54 am

Thanks Joe!


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