Heavy Mechanical Replacement & Structural Wall Removal Fix & Flip

The Investor Scenario & Opportunity

An active real estate developer secured an off-market three-story historic brick rowhouse in the Fells Point neighborhood of Baltimore, Maryland. Located near Thames Street, the harbor waterfront, and Broadway Market, Fells Point is a high-demand historic sub-market popular with corporate professionals, medical staff, and executive buyers seeking walkability to dining and maritime amenities.

The deal originated through direct For Sale By Owner (FSBO) marketing. The private owner inherited the property and wished to execute an immediate direct cash transaction without listing on the open market, hosting public showings, or paying real estate broker commissions. The investor negotiated an as-is purchase price of $285,000. Fully renovated historic rowhouses on surrounding blocks featuring updated utility systems and open main floor layouts were selling consistently around $600,000.

The Strategy & Capital Requirement

The primary challenge was settlement speed combined with cash flow management across active projects. The FSBO seller established a strict six business day closing window to access cash proceeds for a pending out-of-state property purchase.

At the same time, the investor had capital committed to an active full-gut renovation site in nearby Federal Hill. To maintain adequate liquidity for trade contractor payroll and material deposits on that job site, the borrower required a direct loan facility covering 90% of the purchase price and 100% of the construction scope.

The Henry Solution (Loan Mechanics & Underwriting)

Hard Money Henry underwrote the loan using direct real estate equity and local sub-market sales comparables. Our internal underwriting team evaluated recent Fells Point rowhouse transactions within 24 hours, bypassing institutional appraisal delays.

We issued a firm commitment letter and structured a $393,750 total loan facility, financing 90% of the purchase price ($256,500) and 100% of the renovation scope ($137,250). Construction capital was held in escrow and disbursed across four structured draw inspections as work was completed. The transaction funded and closed in five business days.

The Financial Win & Outcome

The developer executed a 90-day comprehensive renovation program. The core value-add strategy focused on complete mechanical system replacement and main-floor structural wall removal. The investor allocated $62,000 of the $137,250 budget to replace obsolete utility infrastructure with dual-zone high-efficiency HVAC units, upgrade the electrical service panel, re-pipe plumbing lines, and install structural steel beams to create an open-concept living space.

The remaining $75,250 funded a luxury gourmet kitchen with a central island, custom tile bathrooms, refinished original hardwood flooring, fresh interior paint, and exterior historic masonry repointing. Eliminating mechanical concerns and opening the main floor layout generated competing offers within six days of listing.

• Purchase Price: $285,000
• Rehab Budget: $137,250 (Heavy mechanical replacement, structural wall removal, luxury interior finish)
• Financing & Holding Costs: $24,000
• Selling Costs (6%): $36,000
• Total Cost Basis & Expenses: $482,250
• Final Sale Price: $600,000
• Net Profit: $117,750

Key Takeaways for Local Investors

• Upgraded mechanicals remove buyer inspection friction. Replacing outdated utility systems and installing dual-zone HVAC eliminates primary inspection hurdles in historic rowhouses.
• Direct FSBO deals require guaranteed closing speed. Partnering with a direct balance-sheet lender who guarantees settlement in five business days allows investors to win clean off-market acquisitions.
• 100% construction debt preserves active cash flow. Structuring financing to cover complete renovation draws keeps working capital available for concurrent development projects.

Planning a single-family fix and flip or historic rowhouse renovation in Baltimore or Maryland? Submit your property address at hardmoneyhenry.com/apply for a 24-hour commitment letter.