Found an off-market North Texas property that survived our initial screening.
At a $730,000 acquisition price, approximately $120,000 in presumptive rehabilitation, and a preliminary working ARV of approximately $1.05 million, the opportunity warranted a closer look.
The property address and identifying details are intentionally withheld while the opportunity remains active.
Here’s how we analyzed the deal, what we believe the property may need, where we built in contingency, and what still requires professional due diligence.
Property Snapshot
Acquisition Price: $730,000
Property Type: Single-Family residence
Bedrooms: 4
Bathrooms: 4 full baths
Living Area: Approximately 4100 sq. ft.
Lot: Approximately 1 acre
Garage: 3 Car
Year Built: 1989
The property has substantial existing architectural character, including built-ins, extensive woodwork, large living spaces, and custom details that may be worth preserving during renovation.
Our preliminary review suggests that the primary opportunity is modernization rather than reconstruction.
Presumptive Rehabilitation Scope
For our preliminary analysis, DP Secured Investments is using a $120,000 presumptive rehabilitation budget.
Based on the property information and photographs currently available, our working renovation scope includes:
- Flooring: Replacement throughout most or all of the residence with materials appropriate for the property and targeted resale market.
- Paint and wall finishes: Full interior refresh of walls, ceilings, trim, and doors as needed. Select existing wallpaper maybe be preserved where it complements the finished design.
- Woodwork and built-ins: Clean, repair, and selectively refinish existing cabinetry, built-ins, desks, trim, and architectural woodwork where condition allows. Preservation is preferred over unnecessary replacement.
- Kitchen: Modernization rather than an automatic demolition and rebuild. Our presumptive scope includes countertops, backsplash, appliances, lighting, fixtures, hardware, and selective cabinet refinishing where appropriate.
- Primary bathroom: Full renovation and modernization
- Remaining bathrooms: Renovation and/or updating based on individual condition, including flooring, vanities, fixtures, lighting, plumbing fixtures, and finishes as appropriate.
- Lighting and hardware: Selective replacement of dated light fixtures, ceiling fans, switches, plumbing fixtures, and hardware.
- Visible repair areas: Investigation and repair of areas where plumbing fixtures appear to have been removed or wall finishes have been opened or left incomplete.
- Exterior and landscaping: General cleanup, trimming, landscaping, and curb-appeal improvements.
The objective is not to gut the property simply because it is dated. Where quality cabinetry, built-ins woodwork, and architectural details remain serviceable, our preliminary strategy is to preserve them and modernize around them.
Contingency Reserve
In addition to the planned $120,000 rehabilitation budget, our analysis carries a separate $30,000 contingency reserve for conditions that cannot be identified through photographs and desktop analysis.
Expected rehabilitation: $120,000
Maximum stress-tested rehabilitation exposure: $150,000
The contingency is not a spending target. If it is not needed, it remains unspent.
Comparable Sales and Preliminary ARV
Comparable sales indicate that values in this market can vary substantially depending on condition, renovation quality, and amenities.
One particularly relevant comparable involved an approximately 4,129-square-foot property with four bedrooms and four bathrooms that sold for approximately $1.05 million. Its size and configuration make it an important reference point for our preliminary analysis.
Rather than relying on the highest sales in the area to justify an aggressive valuation, we are using the following preliminary range:
- Conservative ARV: $1,000,000
- Working ARV: $1,050,000
- Upside scenario: $1,000,000
The working ARV is not a guarantee of future value. Final value should be supported through additional comparable-sale analysis, property condition review, appraisal, and appropriate professional due diligence.
Preliminary Deal Math
Using our current working assumptions:
- Acquisition price: $730,000
- Presumptive rehabilitation budget: $120,000
- Purchase plus planned rehabilitation: $850,000
- Working ARV: $1,050,000
This creates a preliminary gross spread of $200,000. The $200,000 is not projected investor net profit. Financing fees, points, interest, acquisition and closing expenses, property taxes, insurance, utilities, maintenance, holding expenses, selling costs, and other project expenses still need to be deducted before potential net profit can be full determined.
Stress-Test
We deliberately do not assume that renovation will proceed exactly as planned. If the entire $30,000 contingency reserve were required:
- Acquisition price: $730,000
- Maximum rehabilitation exposure: $150,000
- Purchase plus maximum rehabilitation: $880,000
- Working ARV: $1,050,000
That would leave approximately $170,000 of raw spread before financing, carrying, acquisition, and disposition expenses. This does not mean the investor would make the $170,000. Appropriate fees and costs would need to be factored in. The purpose of the stress test is to determine how much unexpected cost the opportunity may absorb before it stops meeting the investor’s required risk and return criteria.
Why This Opportunity Earned a Closer Look
The acquisition price appears to leave enough potential margin to justify further investigation. A highly comparable nearby sale provides support for testing a finished value around $1.05 million. Available photographs suggest modernization-oriented renovation rather than obvious wholesale reconstruction.
Existing architectural character may allow renovation dollars to be concentrated on flooring, finishes, kitchen and bathroom modernization instead of unnecessarily replacing expensive features that remain serviceable.
Most importantly, our analysis does not depend on everything going perfectly. A separate contingency has been incorporated specifically because desktop analysis cannot identify every physical condition that may be discovered during renovation.
What Needs to Be Verified
Before an investment decision is made, additional due diligence should include:
- Professional property inspection
- Contractor-supported rehabilitation scope and estimates
- Roof and HVAC verification
- Foundation review
- Electrical and plumbing condition
- Window and exterior condition
- Title review
- Insurance availability and cost
- Additional comparable-sale analysis
- Appraisal
- Final financing terms
- Interest and points
- Expected holding period
- Selling and disposition expenses
- Projected net profit
- ROI
- DP Preliminary Verdict
- Proceed with full due diligence and verification.
- We are not calling it a good deal just yet.
However, based on the information currently available, the opportunity appears to contain enough potential margin and sufficiently supportable valuation evidence to warrant continued review and professional due diligence.
INVESTORS
Investors interested in learning more about an active opportunity or discussing potential financing may contact DP Secured Investments directly for additional information, subject to availability, qualification, and applicable disclosures.
Important Disclosure
This analysis is provided for educational and preliminary deal-screening purposes only. Property condition, rehabilitation scope, rehabilitation costs, comparable sales, ARV, financing assumptions, and potential investment performance remain preliminary estimates or assumptions based on currently available information.
This analysis is not an appraisal, property inspection, contractor estimate, lending commitment, legal opinion, financial advice, investment recommendation, or guarantee of property condition, cost, value, financing, or return.
Investors should independently verify all material information and consult appropriate qualified professionals, including inspectors, contractors, appraisers, lenders, title professionals, insurance professionals, attorneys, and other advisors before making an investment decision.
DP Secured Investments
Analyze first. Understand the risk. Then decide.