Attached Rear Garage Conversion & Studio Suite Buildout Fix & Flip

The Investor Scenario & Opportunity

A local real estate investor negotiated an off-market purchase directly from a private owner in the East Passyunk neighborhood of South Philadelphia. Located near East Passyunk Avenue and Tasker Street, the location features high residential demand driven by local retail, dining corridors, and transit access to Center City.

The seller was facing an immediate out-of-state corporate job relocation and required a direct cash transaction to facilitate the move without waiting for open market listings or retail mortgage contingencies. The investor negotiated a purchase price of $135,000 in as-is condition. Fully renovated rowhouses on surrounding blocks with flexible ground-floor living space were selling consistently around $285,000.

The Strategy & Capital Requirement

The primary challenge was settlement speed combined with cash preservation across active projects. The seller set a strict seven business day settlement window to align with corporate housing commitments on the West Coast.

At the same time, the investor had capital deployed across two active renovation sites in Point Breeze. To maintain proper liquidity for subcontractor payroll and material orders on active job sites, the investor required a direct loan facility covering 90% of the purchase price and 100% of the renovation construction draws.

The Henry Solution (Loan Mechanics & Underwriting)

Hard Money Henry evaluated the deal based on property equity and local East Passyunk sales comparables. Our underwriting team completed an in-house asset evaluation within 24 hours, bypassing third-party appraisal delays.

We issued a firm commitment letter and structured a $180,250 total loan facility, financing 90% of the purchase price ($121,500) and 100% of the construction scope ($58,750). 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 investor completed a 60-day targeted renovation program. The primary value-add strategy focused on converting an underutilized attached rear garage into a flexible ground-floor studio suite with a full bathroom and private exterior access. The investor allocated $23,500 of the $58,750 budget to reframe the garage opening, run new plumbing and electrical lines, and construct the studio suite.

The remaining funds covered an open-concept main floor, modern kitchen cabinetry with quartz countertops, updated bath fixtures, refinished hardwood flooring, and fresh interior paint. Adding a flexible ground-floor suite provided multi-generational utility or work-from-home space, resulting in a full-price purchase contract within seven days of listing.

• Purchase Price: $135,000
• Rehab Budget: $58,750 (Garage conversion to studio suite and full interior renovation)
• Financing & Holding Costs: $10,800
• Selling Costs (6%): $17,100
• Total Cost Basis & Expenses: $221,650
• Final Sale Price: $285,000
• Net Profit: $63,350

Key Takeaways for Local Investors

• Flexible ground-floor space drives urban interest. Converting underutilized rear garages into functional living suites or home offices increases usable square footage and elevates resale pricing.
• Job relocation deals require rapid settlement. Partnering with a lender who guarantees closing in five business days allows investors to win private off-market deals from motivated sellers.
• 100% construction debt protects active reserves. Structuring financing to cover complete renovation draws keeps investor capital free for concurrent active job sites.

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