Have you ever felt lucky that your parents taught you something? For me, that luck was my father teaching me from the school of hard knocks. The introduction course? Practical Sense 101. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Even though I didn’t enjoy it at the time, my father would bring me around the house as things broke down. From plumbing to pools to drywall to tile, he always had an attitude of fixing it himself. That has always been my attitude—until recently when I decided to start investing in multifamily apartments. I realized that it’s nearly impossible to do all the work yourself. But my first four single family rehabs were hands-on. Tapping into the handyman experience I learned from my dad, I was able to make $26,000 on one simple property. I want to share that story here. But before we get into it, let’s take a look at the numbers. Single Family Real Estate Deal by the Numbers Purchase Price: $100,600.00 As-Is Value Appraisal: $146,000.00 ARV Appraisal: $187,000.00 Repair Budget: $10,371.76 Cashing in on Sweat Equity With this property, I did it all—refinishing hardwood floors, drywall, painting, baseboard, crown molding, trim work, interior and exterior doors, glass repair, remodeling the kitchen, tile work, toilets, vanities, lights, windows, brick/patio work, removing trees, and everything in between. I’ve got a pair of lucky LL Bean jeans and boots that are covered in hours of hard work. Related: The #1 Money-Saving DIY Skill Every Rehabber Should Learn There is something to be said about learning from doing, and I’m truly blessed that I have that ability to figure things out. I’ll admit, it can be hard at times. This is especially true when you build a built-in breakfast nook and assume two-by-fours are actually measured 2 inches by 4 inches… You should have seen the scrap pile. 😉 Looking for Potential But as I progress in my investing career, the things my father has taught me are invaluable to the process of buying real estate. When I walk through a property now, I don’t notice the paint color or the make and model of the appliances. I look at quality of work, construction materials, and whether the property has potential. My father taught me to have an eye and focus on the final product. All his teachings work through me in every deal. The most important factors were to buy right and buy something with potential. So, when walking through this project, I saw the end product and not the foreclosed mess that was left behind. And by doing the work myself, I was able to save on construction costs. The material cost was $10,371.76. If I had hired it out, the labor would have added another $10K to $15K. Yes, it still would be a profitable investment but not as much as paying myself over $26,000 at the time of the refinance. Acknowledging It’s Not Magic The title of the article sounds like a sales pitch, right? Like I have some magic seven-step process or secrets of the trade. And for only $997, you can have them, too! No way! I just want to show you how I completed this deal. The only magic comes in the form of my three golden rules for investing: “Do what you’ll say and say what you’ll do.” “Protect your lender and yourself through buying right.” “Don’t get emotional.” Buying the Property When buying a foreclosure, you typically offer cash and take the property as-is. This leaves you with two struggles. The first is that you must complete all your due diligence at the time of the walkthrough. This is where my father’s lessons have come in handy. However, I still like to get an expert’s opinion, because I am not a master in all fields. The other struggle is the financing. Buying this property for $100,000 cash as a former teacher was a big problem. I didn’t have nearly that amount of money in savings. In fact, I actually had to borrow all of it and more. In return, I gave my investors a return on their investment secured by the asset (first position for the purchase and second position for the rehab). Plus, it was also insured, just in case something catastrophic happened. My total loan amount was around $117,000, which is 63 percent of the final value (ARV). Closing and Beyond Within an hour, I was in my boots and jeans, working on the exterior of the house. I believe it is important to start on the outside. The neighbors will thank for it, as well. Related: 8 Simple Steps to Close Real Estate Deals Like a Rockstar Typically, these houses haven’t been lived in for awhile, and the grass is knee-high. With just a lawn cut, tree/bush removal, power-washing, shutters, and mulch, you can truly make the property pop! For the next 11 and a half days, I busted my butt, working around the clock. Work ethic was another thing I was grateful my father had taught me: “Early to rise, last one to leave.” Rehabbing Process The entire kitchen was outdated, but the cabinets were structurally sound. New cabinets cost around $3,600 for a 10-by-10 kitchen. I spent $40 on paint, $60 on new hardware, and $150 on countertops, and it took a day of labor. The appliances were bought as a package deal for $2,200. This was my second job refinishing hardwood floors. The hardwood on this property was about 700 square feet. In Connecticut, the cost to refinish floors is $2 per square foot. Of course, it depends on how bad they are and how many coats of poly you want. For me, it cost around $50 to rent the floor sander and another $90 in materials like sand paper, rollers, and clear semi-gloss. Pool removal was not one of my specialties either. So, I found some contractors who were in-between jobs. Total cost was around $3,500 with permits. This was, by far, an amazing deal for me. Other quotes came in around $5,500 to $7,500. The reason I removed the pool was that the cost to keep it was far greater than removing it. Eventually, I will keep the house as a rental and didn’t want the liability and upkeep that comes along with pool ownership. Cashing Out for $26,000+ Once I completed the rehab work, I put the property up for rent, while I waited for the seasoning requirements in Connecticut. Typically, lenders want to see a year of ownership before they will give you long-term debt on a house. Once that year was up, I went to the bank to talk about getting 80 percent of the equity out. Here is where the magic happens, so follow closely: I bought if for $100,600. I had another $17,000 in rehab and holding costs. My tenants paid the carrying costs for the first year. I then went to a bank to do a cash-out refinance and told them I would like to pull some equity out (80% LTV). The house appraised for $185,000, which means a $148,000 loan (185,000 x 0.8=148,000). I paid my investors the $117,000 I owed them for borrowing the funds. I got to keep the rest, minus closing costs. This resulted in a $26,663 tax-free check! I know I made it sound easy, but there were countless hours of reading books, attending investor meetups, and hands-on experience that made this deal possible. And with real estate, there is always risk. But with the right amount of knowledge and experience, magic can happen. Questions about the deal above? Comments? Let’s talk below in the comments.