Third-Floor Primary Suite Addition & Dormer Buildout Fix & Flip

The Investor Scenario & Opportunity

A local real estate developer contracted a three-story brick rowhouse in the Port Richmond neighborhood of Riverwards Philadelphia. Situated near Richmond Street and Lehigh Avenue, the asset sat in a growing residential sub-market with strong entry-level buyer demand from commuters accessing Interstate 95 and Center City.

The property was an asset liquidation under a Chapter 7 bankruptcy court mandate. The court trustee required a cash settlement within seven business days to execute creditor payouts. The developer secured the contract for $148,000 in as-is condition. Fully renovated three-story rowhouses on surrounding blocks with updated primary suites were trading consistently near $310,000.

The Strategy & Capital Requirement

The core objective was funding speed paired with working capital preservation. The bankruptcy court order imposed a non-negotiable seven business day settlement window. Failure to meet the court funding deadline would lead to immediate contract termination and property re-auction.

Additionally, the developer had substantial equity tied up in an active two-unit conversion project in nearby Fishtown. Preserving liquidity was crucial for subcontractor payroll and upcoming material deliveries on the active job site. The developer required a direct lending partner capable of funding 90% of the purchase price and 100% of the renovation scope within five business days.

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 Port Richmond sales within 24 hours, bypassing the delays of third-party appraisals.

We issued a firm commitment letter and structured a $193,120 total loan facility, financing 90% of the purchase price ($133,200) and 100% of the construction scope ($59,920). Construction funds were escrowed and released across three milestone draw inspections as work was completed. The transaction funded and closed in five business days.

The Financial Win & Outcome

The developer completed a 60-day targeted renovation program. The primary value-add strategy focused on converting an underutilized third-floor attic space into a dedicated primary suite with a custom dormer extension. The investor allocated $24,000 of the $59,920 budget to frame a structural dormer, run new plumbing and electrical lines, and construct a private bathroom with double vanities and custom tile.

The remaining funds covered an open-concept first floor, new kitchen cabinetry, quartz countertops, refinished hardwood flooring, and fresh interior paint. Adding a full third-floor primary suite increased the usable living area and created a focal sales feature, generating multiple offers within eight days of listing.

• Purchase Price: $148,000
• Rehab Budget: $59,920 (Third-floor primary suite addition, dormer framing, and interior updates)
• Financing & Holding Costs: $11,500
• Selling Costs (6%): $18,600
• Total Cost Basis & Expenses: $238,020
• Final Sale Price: $310,000
• Net Profit: $71,980

Key Takeaways for Local Investors

• Dormer expansions unlock vertical square footage. Converting underutilized attic space into dedicated third-floor primary suites drives resale value and differentiates urban rowhouse inventory.
• Bankruptcy mandates demand guaranteed execution. Partnering with a lender who guarantees closing in five business days allows investors to win strict court-ordered asset sales.
• 100% construction debt preserves active cash flow. Structuring financing to cover total renovation draws maintains working capital across concurrent development sites.

Need direct hard money capital for a fix and flip or rowhouse expansion in Philadelphia? Submit your property address at hardmoneyhenry.com/apply for a 24-hour commitment letter.