As part of our broader strategy of buying homes in cities experiencing a housing shortage, we’ve acquired a four-bedroom, two-bathroom home in the Brightwood Park neighborhood of Washington, DC for approximately $548,000.
Business plan
The home is structurally sound, but the interior is outdated. We anticipate spending about $150,000 to perform a full renovation before putting it on the market. Together with the initial acquisition costs, this brings our total commitment to about $698,000. Based on comparable homes in the area, we believe we will be able to sell the renovated home for at least $783,500, a gross profit of about $85,500.
Why we invested
- Fast-growing neighborhood: Over the five-year period ending March 2018, the Zillow home value index in the 20011 ZIP code has increased from $348,000 to $593,000, a trend that we believe will continue as prospective homebuyers are priced out of more established areas.
- Strong, stable local economy: With over 30% of residents employed by the government, the DC market is uniquely insulated from national economic downturns. In addition to federal workers who generally earn comfortable middle-class salaries, there are thousands of highly-paid private sector employees such as consultants, lobbyists, and lawyers. For more information, please see our DC Market Analysis.
