Single-family residence buy & hold investment in Detroit.
Hi everyone! I am currently working on rehabbing my first Investment property to flip. Please let me know what you guys think.
We’re in the final stages! Painting is complete, kitchen cabinets have been installed, plumbing is finished, floors are sanded. Did a walkthrough created a punch list of more things to get completed/touched up. Decided to replace outlets and fixtures ourselves to save a couple hundred dollars. Gotta put the property up on Zillow to start screening tenants.
Thanks to Vinson for painting, plumbing and acting as project planner/general contractor. Thanks to Jeremy and Rob for the advice. Thanks Quentin Sharpe for the floors (they turned out great!).
Here are the details: This home is located in the Nortown neighborhood of Detroit, Michigan. It's a 3 bedroom, 1 bath, 1,194 sq ft. brick home with an un-finished basement and no garage.
My original estimated rehab costs was $30,000, which comes out to $25/sq ft. Re-hab includes painting whole house, renovating the kitchen and installing a half bath in the basement. I purchased it at $18,000 with about $3,000 in closing costs. I incorrectly estimated the ARV to be $73,000. Which would have gave me a gross profit of $21,000, with estimated $3,000 in closing costs which leaves $18,000 in net profits. A contractor come out and estimated the initial reno costs to be $36,230. The actual ARV in the area is $45,000. So I decided to cut back on a kitchen gut and installing the half and re-focused on making this home a rental. Cut renovations to $17,000. Rents in the area $800-$850. Expected cash flow is $512. Please provide feedback. Thanks!
What made you interested in investing in this type of deal?
Looked like a good deal.
How did you find this deal and how did you negotiate it?
Wholesaler sent it to me.
How did you finance this deal?
Self Directed IRA
How did you add value to the deal?
Painted, replace vanity, replaced kitchen cabinets.
What was the outcome?
Lessons learned? Challenges?
Don't estimate future value. Take numbers as is.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
@Jamal Adams congrats on the flip
@Gary Carver Thanks!
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