Selling The Ravenna House // The Final Numbers: How We Made $460,000 in 5 Years


The Ravenna House closed last month and today we’re running through the final numbers. This house is a great example of our real estate model and while we’ve shared stories and photos from the renovation for years, we’ve never pulled back the curtain on the finances before. So today you’re finally getting the full picture on what exactly it is we do with a property and why. For those thinking about buying a home, taking on a renovation, or becoming landlords, we hope you take something away from this post that’s useful. Read on for how we made $460,000 on the Ravenna House in 5 years.

photo by Meghan Klein for the Grit and Polish

Four-hundred-and-sixty-thousand dollars is a TON of money. Especially considering the bulk of it was tax free (more on that in a moment). And we earned it all in just 5 years from a total investment of $60,000 including renovations, down payment, everything.

Before I dive into the numbers, I wanted to mention that Garrett and I are self-taught DIY-ers in renovation, real estate, and landlording. We fixed up the Ravenna House while working 9-5 jobs and raising our first son. We got our start in real estate with little more than a can-do attitude, helpful families, and visions of renovations dancing in our heads. Ha! While we’ve certainly been lucky along the way (scroll down to the takeaways section for more on that), we’ve also put in loads of hard work and been persistent. You can read more about our background here.

photos by Meghan Klein for the Grit and Polish

The Numbers

We bought the Ravenna House – a 1926 Tudor in Seattle – in 2013 and proceeded to renovate every square inch of the property. Our small family lived in the house for two years while fixing it up and then moved on to our next project and turned Ravenna into a rental. In September of 2018, just 1 month shy of the 5 year mark, we sold Ravenna and walked away with a big fat check. You can read a more detailed timeline of the investment below (including the unique way we financed this property), but first, let’s get to the numbers.

Sale Price $775,000

Net Rental Income (2.5 years) $70,000*


Purchase Price $270,000

Initial renovations $50,000

New Roof $7,700

Selling Preparations $2,000

Real estate fees (4%) $31,000

Excise Taxes (King County, WA) $13,800

Closing Expenses $3,231

Total Return $467,267**

* Rental income from ~2.5 years less expenses (mortgage, insurance, utilities, cleanings). 

** At some point while living in Ravenna, we took out a large HELOC against the equity we had built up, which we used to buy the Dexter House, and later the Farmhouse. We counted that expense against those later properties so you don’t see it here, but we did pay it off when we sold Ravenna.

photos by Meghan Klein for the Grit and Polish

Timeline and More Financial Details on Ravenna

There’s a lot to unpack in those numbers, so let’s run through some key moments:

  • Summer 2013: Have our first baby and finish a kitchen and bath remodel on the Bryant House
  • Received an inheritance and Cathy can’t help but look for a fixer upper (well she’s always looking for a fixer…).
  • Sept 2013, find a great opportunity 10 blocks away from Bryant House and it’s right in our sweet spot: built in 1926, ~900sqft 2 bed 1 bath in almost original condition, and an unfinished basement listed for $230k
  • The house smells like animal and has a very scary basement, rats in the attic, and a tiny kitchen with no place for a fridge or dishwasher. There is no heat source, the yard is a jungle, and the detached garage is literally falling down. Only cash offers are being accepted.
  • Our family pretty much thinks we’re crazy but are willing to loan us $210k and we come up with the rest of the cash to put an offer of $270k in. We’re one of 11 offers. The owner likes that we’re a family (the rest of the bids are from developers) and picks our offer even though it’s $16K under the highest bid. We pay $270k for Ravenna and close a couple of weeks later.
  • Weekends and evenings are now spent remodeling the main floor. We replace all the plumbing and electrical, bring gas to the property, add a new furnace, remove the oil tank in the backyard (we hire that out), gut the kitchen and open it up to the living room, renovate the bathroom, and refinish the original oak floors (we also hire that out).
  • After the main floor is done, we turn our attention to the basement and begin finishing the unfinished ~600sf into a family room, bedroom, laundry room and bathroom.
  • Six months after purchasing the home, the main-floor reno is complete and downstairs is framed and roughed-in. We use delayed financing (more on that below) to mortgage the property for $270k and payback family members. We created enough equity in the property with renovations that no cash downpayment is required.
  • After finishing the basement 8+ months after buying the home, we have the home appraised at $550k and apply for a HELOC. At this point, we’ve spent ~$50k in renovations to completely update the house, which is a return of about 460% on our cash investment [($550k-$270k-$50k)/$50k]. Not bad for a couple crazy love birds but it gets better…
  • We decide to use the HELOC to purchase another property and so 2 years after purchasing Ravenna, we move on to Dexter and turn Ravenna into a rental. Over the next ~2.5 years we net just over $70k in rental income.
  • Two months prior to our capital gain exclusion running out (more about that in the tax section below) we give Ravenna a new roof, a master bedroom refresh, and some staging before putting it on the market for $775,000 with Redfin. We receive a full-price, cash offer 5 days later.

photos by Cathy Poshusta

Why Most of our Profits are Tax Free

Our net rental profits from Ravenna were not tax free, but our sale profits are. Sellers are required to pay capital gains taxes on real estate profits to the tune of around 15%. But there’s an exemption for primary residences as long as you live in the home for 2 of the last 5 years. Our exemption was coming up in October of 2018 and that’s why we started to consider selling the home in the first place (you can read more about that here). If we had sold Ravenna after our 2-in-5 exclusion ran out we would have owed over $60,000 to the federal government.

What is Delayed Financing

We bought the Ravenna House for cash and then financed it within the first 6-months, a process called delayed financing. There are some specific requirements for delayed financing (you can read more about that here), but we love that it allows you to make an appealing cash offer and still finance quickly. Plus, if you’re doing renovations like we did on Ravenna, you can use the equity you’ve built in the property as the down payment so you limit the amount of cash you have tied up in the property.

TAKEAWAYS from the Ravenna House Sale

There are a lot of reasons why we believe we made so much money on Ravenna and we wanted to distill those today for anybody getting into real estate, renovating, and/or landloring.

Location // The Ravenna House is located in a desirable, close-in neighborhood of Seattle (called Ravenna). There are great schools here, parks, community centers, restaurants, and easy access to downtown. All that adds up to expensive home prices. And of course Seattle has had one of the hottest real estate markets in the nation for the past 5 years. Taking a step back and looking nationally, I have to say that this kind of profit would not likely have been possible outside of a few large urban centers, mostly located on the coasts. Of course there’s money to be made in residential real estate most everywhere, but just not as much. We were really lucky to have landed in Seattle, but we stayed for as long as we did in large part because we saw the income potential. It’s much easier to make money in a big city and retire to a small town and that’s what we did in 2016.

Timing // Buy Low, Sell High. We bought Ravenna in 2013, which was basically the low of the recession, and sold it in 2018, which feels near a high (at least for a bit). Timing is everything and we were lucky to have been able to buy a home in 2013 and even luckier that we were able to hold on to the property for as long as we wanted. If we had sold Ravenna after one or two or even three years we would not have made nearly as much money. We’re really partial to the buy-and-hold model.

Luck // We were luuuucky. The only reason we got this house to begin with was because the previous owner took a shine to us (more here). We probably, tipped fate a bit by submitting a heartfelt letter (with a picture of us and our newborn son standing on his front steps, which you can see at the bottom of this post), but even so, there’s an element of luck in everything…timing, being in Seattle, having family that could loan us cash. Lots of luck everywhere.

Fixer // buying a fixer is one of our core principles in real estate. If it doesn’t need work, we’re not interested. Sweat equity is our thing.

Make Smart Upgrades // Every dollar you have has the potential to make money for you. Here at the Grit and Polish we’re always talking about being financially-responsible with renovations, but what exactly does that mean? Well it means $460,000 payouts instead of a Pinterest dream kitchen. It means buying a second property (and eventually a 3rd and 4th…)  instead of putting $50,000 more into our beloved Wallingford house. We don’t talk a lot about the Wallingford House here on the Grit and Polish – mostly because we bought it long before I started this blog or got a good camera – but it’s our favorite Seattle property by a long shot. We would have enjoyed creating a second story master retreat and expanding the kitchen and living a block from the park on a quiet side street in Seattle’s best neighborhood (yes, best ;). But rather than retire at 34, we would have worked for decades longer. Rather than film an HGTV pilot and help our families and friends with renovations, we’d be dealing with commutes and spending every day in a cubicle. Don’t get me wrong, that’s not a bad road to take (and if that’s your dream, more power to you!), it just wasn’t the road for us. We took the house hacking and early retirement road and we’re glad we did. The lesson here is be smart about the money you put into a property. Think about the return you’ll get on that money and if a renovation is worth delaying retirement for or skipping vacations or missing out on the fixer down the road. Every dollar you have has the potential to make money for you.

DIY // Do everything yourself that you possibly can. I even added the title “DIY real estate investing” to the pin-friendly images in this post because it’s been that important to our success. Doing it yourself saves a ton of money and gives you the opportunity to learn. We’ve become proficient DIY renovators, landlords, property maintainers, plumbers, framers, decorators, stagers, and lots more. I can’t begin to guess what DIY has saved us to date, but it’s certainly in the hundred of thousands.

Playing the Long Game // Garrett and I have always treated real estate as a long game. We are willing to delay the payout on a property for a very long time in favor of rental income. Not only did that make the difference between a small payout and a giant payout at Ravenna, but it meant we could retire at 34 and live off of our rental income. Of course I’m not saying to hold on to an income property that isn’t positive every month (we make sure our’s bring in at least 10%), but being patient can pay off. Real estate is considered a fairly safe investment that increases in value pretty reliably over time.

Those are all of our takeaways, but we’d love to hear any wisdom you may have. Or if you’re just starting out, are there any questions you have? Please add to the conversation in the comments below!

kitchen photo by Cathy Poshusta


Available here (more updates coming soon)

Related Posts

How to Sell a Home – What we did to Prepare Ravenna for Sale // Why we Decided to Sell One of Our Seattle Rentals // How we Saved $5k on Ravenna’s Roof // What to look for in your first home (House Hacking edition) // Our Story: Old Houses and Early Retirement //

photo by Robin, our first Redfin agent

photo by Cathy Poshusta

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  1. I love these honest financial posts! I sometimes feel like our house is a money pit, but I’m hopeful we’ll sell it for top dollar when the time comes, even if we hired out some projects and even if we don’t rent it out. But these posts keep reminding me to keep the idea of a rental on the table!

    Keep these posts comin’!

    • Thanks Ashley. It’s always a little tough to publish these, so glad for the feedback. I’m pretty sure all old houses are money pits in some sense of the word, but you guys are doing that house right!

  2. Thanks for all the info! I wish we would have bought a few houses in 2010 in Arizona but my husband had no interest. We probably could have make a bunch of money too. Oh well, guess he gets to keep working.

  3. Well now we must learn more about the Wallingford House! Is it a long term rental? Airbnb?

    • Ha, yes! It’s a long term rental. I think I shared a bit about it in my post on “What to Look For in Your First Home”, but it’s definitely the house we would have ended up in if we stayed in Seattle.

  4. We are looking at our first flip in real estate investing, but I’m expecting my third and we have two young kids. Did working and remodeling on weekends bring stress to your family? What did you do with your kids? I’m motivated to learn and grow by investing but I don’t want to sacrifice my precious “stay-at-home” mom status in order to get ahead. Any advice?

    • I’m trying to think how to say this gently, but YES. Having a renovation going is super disruptive to family life. Not saying it’s all bad, but definitely disruptive. Obviously it’s a trade off, but if you’re doing the work yourself, most of your nights and weekends will be eaten up. We swapped cooking for pizza and down time for long nights and weekends working (we are lucky to have a Nana who loves to watch the kids).

  5. Fascinating post! Thanks for sharing the details!

  6. Wow! Amazing work! There’s one thing I keep wondering about though. Did the owner you bought the house from know that you were going to fix it up to sell? Even though you guys are a family and not a big development corporation, I would imagine that in choosing to sell to you (despite your bid being so much lower), that he had dreams of you guys living there a long time? Or maybe he was just happy to know it would be given individualized love and attention?

    • I don’t think he could have known because we didn’t know we were going to sale until this Spring. We actually thought we’d own all of our homes forever, but obviously that changed. I see your sentiment though, and gosh it’s hard to say. We had lots of great family times in that house, and I don’t think you could want much more.

  7. So, so happy for you!! Selling was for sure the right move.

  8. This is so interesting! Also, hate to be that commenter, but do you have a source for the hanging chair in the kids room? I couldn’t find it on the source post for the Ravenna house.

  9. Yes, your timing was great, yes you got lucky and yes you were in the right place – BUT you worked your asses off, took appropriate chances, were flexible about the outcome and understood some very basic tax laws. Whenever I try to explain this to other people their eyes glaze over and they turn away. Good thing your eyes did not glaze over.

  10. This is a wonderful post, and I really appreciate your willingness to be so transparent about the finances of the project. My husband and I are new to real estate investing but follow a lot of the same guidelines you guys do (sweat equity in old houses FTW!), and we both enjoy seeing it work really well for people who have been at it longer than we have. I think I read the “make smart upgrades” section three times over already- it was very good food for thought!

    I’m also really psyched to see more of Naysa’s converted garage this fall!

    • And I just read Vanessa’s comment- agree 100% with her!!!

    • Thanks so much for the comment, Jen. Sounds like you guys are on your way! Glad that section resonated with you – it’s definitely something we’ve been thinking about a lot lately. Lots of Tacoma coming your way this Fall!

  11. i loooove your honest posts about finances & all that goes into what you guys do! we bought our own 1200 sqft 80 year old tudor in 2009 & had no clue what owning an old house would be like. nobody warned us– at. all! we hated it for years & felt trapped in a money pit until i found blogs like yours several years ago that truly changed my heart & i fell head over heels for old homes. i’m so glad now that we didn’t cut our losses 5 years in like we wanted. we’re slowly working on paying off our debt so that we can have the money to truly love on our house & treat it the way it deserves. we’re also lucky that we’ve been patient because our neighborhood has gone from pretty run down to a place where a lot of millennials are moving to thanks to some cool districts popping up within a couple of miles. anyway, thank you for being open so that people like me can have some hope to make some money one day! 😉

    • First off, thanks for the feedback! It’s always a little nerve racking putting this kind of content out there, but it’s 100% worth it when people can learn from it. And goodness, I get it about old houses. So glad the house has grown on you and the neighborhood has improved. Sounds like you have a great spot!

  12. I’m one of the people who had lots of questions on how these numbers worked, so thank you for going deep on that!

    Also, I want to thank you for your honesty in acknowledging the role that luck played. I think when things work out well for us it’s easy to downplay that part of it, and I really appreciate your transparency — it’s one of the things that keeps me coming back to your blog.

    And congrats on seeing all your hard work pay off!

    • Thanks for the comment, Sarah. I find luck to be such a funny thing because often it doesn’t feel like luck (for instance, when I got laid off and we couldn’t pay our mortgage) but then you add in some hard work and you can turn it into a great opportunity. Luck and hard work seem so intertwined like that.

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