Heavy Mechanical Replacement & Roof Overhaul Fix & Flip

The Investor Scenario & Opportunity

An active real estate investor identified an off-market two-story brick rowhouse in the Waverly neighborhood of North Baltimore. Situated near Greenmount Avenue, Johns Hopkins University Homewood campus, and Morgan State University, Waverly is a high-demand residential area for university staff, healthcare workers, and local commuters.

The seller was facing a maturing private debt obligation and required a direct cash settlement within six business days to satisfy the existing lien and prevent formal judicial foreclosure. The property was in non-bankable condition, featuring active roof leaks, non-functional heating, and outdated electrical wiring. The investor negotiated a direct cash acquisition price of $105,000 in as-is condition. Fully renovated rowhouses on surrounding blocks with updated core utilities and new roofs were selling consistently around $225,000.

The Strategy & Capital Requirement

The primary challenge was settlement speed combined with cash flow preservation across concurrent active job sites. The seller's maturing debt deadline dictated a strict six business day funding window, making conventional bank financing impossible.

At the same time, the investor had equity deployed across an active rowhouse project in neighboring Hampden. To maintain sufficient liquid cash reserves for trade contractor payroll and material deposits on that job site, the borrower required a direct loan facility that funded 90% of the purchase price and 100% of the renovation 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 Waverly rowhouse transactions within 24 hours, completely eliminating third-party appraisal delays.

We issued a firm commitment letter and structured a $140,500 total loan facility, financing 90% of the purchase price ($94,500) and 100% of the construction scope ($46,000). Construction capital was held in escrow and released across three milestone draw disbursements as work was inspected and verified. The transaction funded and closed in five business days.

The Financial Win & Outcome

The developer executed a 60-day targeted renovation program. The primary value-add strategy focused on replacing heavy mechanical systems and installing a new flat rubber membrane roof. The investor allocated $22,000 of the $46,000 budget to replace the roof, install a high-efficiency heat pump HVAC unit, re-pipe internal plumbing lines, and upgrade the electrical service panel.

The remaining $24,000 funded an open-concept kitchen refresh with quartz countertops, modern bathroom fixtures, vinyl plank flooring, and fresh interior paint. Resolving structural utility issues and delivering a new roof removed primary buyer inspection concerns, resulting in a full-price purchase agreement within seven days of listing.

• Purchase Price: $105,000
• Rehab Budget: $46,000 (Rubber roof replacement, full HVAC and utility overhaul, cosmetic updates)
• Financing & Holding Costs: $9,000
• Selling Costs (6%): $13,500
• Total Cost Basis & Expenses: $173,500
• Final Sale Price: $225,000
• Net Profit: $51,500

Key Takeaways for Local Investors

• Utility overhauls eliminate buyer friction. Replacing obsolete HVAC units, electrical panels, and roofs accelerates buyer financing approvals and speeds up settlement timelines.
• Distressed debt deadlines create high-equity opportunities. Partnering with a lender who guarantees closing in five business days enables investors to solve urgent seller debt defaults.
• 100% renovation debt protects working capital. Structuring loans to cover complete construction draws maintains investor liquidity across multiple active projects.

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