Just finishing up on rental unit #8 last week and I will document another deal here in the coming weeks as we just closed on a 2 unit on 3/22/19 for the 7th unit in the business since starting last February and 10th unit for me overall in the past year and a half.
We closed on this property on January 18th and everything was finished around February 18th however we had a lot of issues pop up from the general contractor we used. We ended up having to go back through and have a lot of the work redone to get everything up to standard, instead of saving money with our original contractor; we ended up spending a little more.
This property was located in Baltimore County and was on the MLS and since I am an agent I view the MLS daily to see any new deals and found this one for $99,000 with an ARV of around $160,000. Since it was not on the market too long but the rents are pretty strong in the area we went close to a full list offer at $97,000 with 2% seller contribution while using Hard Money.
The work that needed done to this house was not too much just the typical updating as it was an estate sale and original owners. We ended up doing a new kitchen, bathroom, flooring, paint, repairs to any mechanical's, lights, appliances, etc.
After finishing the home inspection there were a few extra things that were brought to our attention like the furnace leaking a little, vent pipe to the furnace rusting from now being mounted correctly. Instead of asking for more money off the purchase price I just went back to the seller to see if they would increase the seller contribution to 6% which they ended up accepting. At the closing table we only had to bring $1,500 plus the $1,000 EMD which was a very low out of pocket for a rental.
Our Hard Money lender gave us $110,000 in total for the house even though we estimated it would cost around $16,000 to rehab but the numbers didn't fit quite into the 65% of ARV. After all is done we ended up spending just over $17,000 because we ended up buying a few extra things that originally we were not going to so we are all in right around $116,500 with only around $6,500 out of pocket and should appraise at $160,000.
I posted the house for rent last night for $1,375 and already have multiple people interested in viewing this weekend. This was our first house we contracted everything out on and was a learning experience managing everything and having to stop by the house pretty often to make sure what we want was getting done. After the refinance should cash flow around $400-450 per month before vacancy/repairs.
Thanks everyone for reading and hopefully another story to be out very soon on the details on unit #10. Below are some of the after pictures. If anyone needs help buying in Baltimore County would love to help you take the next step.
@Zack Clopper Awesome story, congrats. The place looks great!
@Zack Clopper great work on the property, looks really nice. Looks like you learned a lot through the process as well. This is really all it about. Best of luck on your next unit.
Good information. Thanks for sharing. I've been wholesaling and also have my first rehab about 70% complete in NE Baltimore. I've been learning a lot about rental investing lately and would like to get a rental (up to 6 units or a SF) property in the County or a good section of the city.
Thank you @Yawo Akoussah definitely learned a bit on this project since we contracted everything out.
Thanks @Charles Brown Congrats on the first rehab. I want to get larger multi families however seems like you need to go to Cecil to get into cheaper multies. If you need help in purchasing a rental let me know, would love to help if you aren't an agent already.
Congrats on #8, more to come I am assuming.
Congrats on your success. Good luck on your endeavors.
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