Fix & Flip in Philadelphia, PA: Structural Wall Removal & Open-Concept Transformation

The Investor Scenario & Opportunity

A seasoned real estate developer secured an off-market purchase agreement for a two-story brick rowhouse in the Frankford neighborhood of Northeast Philadelphia. Located near the Frankford Transportation Center with direct subway access to Center City via the Market-Frankford Line, the asset occupied a high-density transit corridor experiencing steady starter-home demand.

The seller was an absentee owner liquidating non-performing residential inventory. The developer negotiated a purchase price of $95,000, contingent on a rapid five-day settlement. Comparable renovated rowhouses in the immediate Frankford sub-market featuring modern open layouts were trading consistently around $205,000.

The Strategy & Capital Requirement

The primary challenge centered on portfolio capital allocation. The developer had two other active renovation projects undergoing mechanical rough-ins in South Philadelphia and West Philadelphia. Deploying substantial liquid cash into this acquisition would have constrained cash reserves needed for ongoing subcontractor payroll and material orders.

The developer required a direct capital partner capable of funding 90% of the purchase price and 100% of the construction scope. Securing full rehab funding through an escrow draw account allowed the investor to acquire a high-margin asset without disrupting operational liquidity on existing job sites.

The Henry Solution (Loan Mechanics & Underwriting)

Hard Money Henry underwrote the transaction based on asset equity and local sub-market sales comparables rather than slow institutional procedures. Our internal underwriting team evaluated recent Frankford rowhouse sales within 24 hours, bypassing third-party appraisal delays.

We issued a firm commitment letter and structured a $128,500 total loan facility, covering 90% of the purchase price ($85,500) and 100% of the renovation budget ($43,000). Construction funds were held in escrow and disbursed across three structured draw inspections as work milestones were verified. The deal funded and closed in five business days.

The Financial Win & Outcome

The developer executed a 60-day targeted renovation. The core value-add strategy focused on structural wall removal to eliminate the dark, compartmentalized feel typical of historical rowhouses. The investor allocated $14,000 of the $43,000 budget to install structural steel LVL support beams, remove the central load-bearing wall, and create an open-concept living and dining floor plan.

The remaining budget funded modern kitchen cabinetry, laminate flooring, fresh paint, and updated lighting fixtures. Creating an open main level eliminated traditional layout limitations, generating multiple offers within seven days of listing.

• Purchase Price: $95,000
• Rehab Budget: $43,000 (Structural wall removal and open-concept conversion)
• Financing & Holding Costs: $8,000
• Selling Costs (6%): $12,300
• Total Cost Basis & Expenses: $158,300
• Final Sale Price: $205,000
• Net Profit: $46,700

Key Takeaways for Local Investors

• Open-concept conversions maximize rowhouse appeal. Removing structural walls to create contiguous living and dining space significantly improves light, flow, and resale velocity in historic urban layouts.
• 100% rehab capital preserves scale. Financing full construction costs allows active developers to maintain operational liquidity while scaling project volume.
• Transit-adjacent sub-markets drive liquidity. Acquiring distressed assets within walking distance of major transit hubs like the Frankford Transportation Center ensures a constant pool of qualified retail buyers.

Planning a rowhouse renovation or structural re-configuration in Philadelphia? Submit your property address at hardmoneyhenry.com/apply for a 24-hour commitment letter.