Heavy Mechanical Replacement & Complete Roof Overhaul Fix & Flip

The Investor Scenario & Opportunity

An active local real estate investor secured an off-market two-story brick rowhouse in the Cobbs Creek neighborhood of West Philadelphia. Situated near Baltimore Avenue and Cobbs Creek Park, the location provides accessible public transit links into University City and Center City Philadelphia, maintaining consistent demand from first-time homebuyers.

The opportunity came from a tired landlord looking to offload non-performing rental inventory. The home had sat vacant following the departure of long-term tenants, resulting in deferred maintenance, obsolete electrical wiring, a failing heating unit, and active roof leaks. The property was unbankable for traditional retail mortgage financing. The investor negotiated a direct cash purchase price of $80,000. Comparable renovated rowhouses in the immediate neighborhood featuring brand-new mechanical systems were selling consistently around $175,000.

The Strategy & Capital Requirement

The core requirement was rapid execution combined with liquidity management across concurrent job sites. The seller established a strict seven business day settlement window to eliminate ongoing property tax liabilities and vacant building insurance expenses.

At the same time, the borrower had capital committed to an active full-gut renovation project in South Philadelphia. To preserve sufficient liquid cash flow for trade contractor payroll and material deposits on that active job site, the investor required a direct capital partner capable of closing in five business days while funding 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 Cobbs Creek rowhouse sales within 24 hours, completely eliminating third-party appraisal delays.

We issued a firm commitment letter and structured a $109,400 total loan facility, financing 90% of the purchase price ($72,000) and 100% of the construction scope ($37,400). Construction funds were held in escrow and disbursed across three structured draw inspections as work was 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 roof. The investor allocated $21,000 of the $37,400 budget to lay a new rubber membrane roof, install a high-efficiency gas furnace, update electrical wiring, and replace internal plumbing lines.

The remaining $16,400 funded interior cosmetics, including white shaker kitchen cabinetry, quartz countertops, modern bathroom fixtures, laminate flooring, and fresh paint. Eliminating mechanical issues and providing a pristine roof removed major buyer inspection concerns, resulting in a full-price purchase contract within nine days of listing.

• Purchase Price: $80,000
• Rehab Budget: $37,400 (Rubber membrane roof replacement, full mechanical overhaul, interior cosmetics)
• Financing & Holding Costs: $7,000
• Selling Costs (6%): $10,500
• Total Cost Basis & Expenses: $134,900
• Final Sale Price: $175,000
• Net Profit: $40,100

Key Takeaways for Local Investors

• Roof and mechanical overhauls remove buyer hesitation. Resolving core structural and utility issues eliminates inspection hurdles and speeds up loan approval for retail buyers.
• Tired landlord sales require fast settlement. Partnering with a direct balance-sheet lender who guarantees settlement in five business days enables investors to secure deep off-market discounts.
• 100% construction debt maintains working capital. Structuring loans to fund complete renovation draws keeps investor cash flow available across concurrent development projects.

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