A little brick veneer goes
a long way
A little brick veneer goes a long way: I’ve been working with my friend, Erick for the last couple of years. Erick is a master of all phases of construction. I on the other hand am a Mark of all trades, master of none. But, we make a good team. I had done three flips with Erick before the last one. It took us about 6 months a piece to flip the first three houses that we worked on. And, we were working like crazy.
We put in a huge amount of hours and basically gutted all of them done and rebuilt them. Usually, we pull out all the trim, the windows, the doors, the heating system, the floors, and then we replace it all with newer and nicer things. They say when you flip a house, you make your money when you buy.
So, we are always looking for the good deals.
All three of the first houses that we bought and flipped we got crazy deals on because they were all foreclosures. We usually paid about half of what the market value was and we could sell it for about double that. It wasn’t all profit though because we had to put in a lot of money for materials and we also broke a lot of tools so there was some bills associated with buying new tools.
In any case we were making a living by finding houses that had been foreclosed on, going in them and gutting them to bare minimum, fixing them back up, and then selling them. I thought that we had a winning formula. What I didn’t know was that a little brick veneer was going to change our whole business model. Erick put a bid on a house that was much higher than anything that we had paid before.
Not only that, but the house itself was only three years old. To top it off, it was really ugly. I didn’t get his strategy. The house was still brand new. All it needed was a good cleaning and Erick might have gotten a good deal on it, but it wasn’t the kind of deal that we needed to get in order for our business model to work.
The trick to it all was that the house was a wood sided house in a brick house neighborhood. The price that Erick had paid was much lower than any of the other houses in the neighborhood because it wasn’t made out of brick.
Erick’s plan was to rip off the siding and install brick veneer and then resell it. It took us less than a week to install the brick veneer and we put it back on the market for a lot more than what Erick had paid for. I was blown away with the response.
When Erick put a bid on it, the owner was desperate because no one was interested. But all of a sudden, with the brick veneer, we were getting multiple offers of the asking price. We made out like bandits on that one. It might change our business model.