Investment Info:

Single-family residence buy & hold investment.

Purchase price: $4,000

Cash invested: $17,000

Bought this baby for $4,000 on Hubzu.com in November 2018. Rehabbed from Washington State. Was done and rented by March 2019. Used cash so it is all paid off and now renting for $650 per month.

What made you interested in investing in this type of deal?

Honestly, I had been looking to buy a foreclosure in Washington State for 2 years and finally gave up. I went to Hubzu and sorted price from low to high. This property was one of the cheapest foreclosures in the nation. I bid and I won.

How did you find this deal and how did you negotiate it?

Hubzu.com, I was the only one who bid.

How did you finance this deal?

I used cash

How did you add value to the deal?

Fixed roof, re-ran electrical, new electrical panel, new flooring throughout (ceramic tile and laminate), new plumbing in bathroom and kitchen, everything in kitchen new, painted.

What was the outcome?

Rented at $650 in 4 months

Lessons learned? Challenges?

Every time a contractor was paid, they disappeared! I would definitely be more cautious about contractors and I never made a trip down to see the home, so next time will walk the house before buying. I got super lucky!
Mistakes I made: Laying ceramic tile instead of linoleum. Maybe should have done carpet instead of laminant. The house is 2,100 sq ft so even cheap flooring was pricy.
Positives: The jobs were itemized with the contractor and I only paid each line on completion. This worked out r

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented myself and the other agent was pretty terrible on a $4,000 home.

Great return!  How far away from the unit do you live and how often were you able to see it?

This is amazingly impressive! I second Joe's question...how far away from the unit do you live? I have been watching several auction sites including Hubzu but have not bid yet. I live in Omaha, NE, which is a crazy market right now. I'm finding it difficult to find deals, even on the auction sites or local wholesalers. I've been considering a foreclosure in other markets, and would love to hear more about how you made the rehab work, what challenges you faced due to your distance from the property, etc. Thanks for sharing this! It's really inspiring!

Originally posted by @Kelsi Dockins :

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $4,000

Cash invested: $17,000

Bought this baby for $4,000 on Hubzu.com in November 2018. Rehabbed from Washington State. Was done and rented by March 2019. Used cash so it is all paid off and now renting for $650 per month.

What made you interested in investing in this type of deal?

Honestly, I had been looking to buy a foreclosure in Washington State for 2 years and finally gave up. I went to Hubzu and sorted price from low to high. This property was one of the cheapest foreclosures in the nation. I bid and I won.

How did you find this deal and how did you negotiate it?

Hubzu.com, I was the only one who bid.

How did you finance this deal?

I used cash from previous sales as a Real Estate Agent in the Greater Seattle Area.

How did you add value to the deal?

Fixed roof, re-ran electrical, new electrical panel, new flooring throughout (ceramic tile and laminate), new plumbing in bathroom and kitchen, everything in kitchen new, painted.

What was the outcome?

Rented at $650 in 4 months

Lessons learned? Challenges?

Every time a contractor was paid, they disappeared! I would definitely be more cautious about contractors and I never made a trip down to see the home, so next time will walk the house before buying. I got super lucky!
Mistakes I made: Laying ceramic tile instead of linoleum. Maybe should have done carpet instead of laminant. The house is 2,100 sq ft so even cheap flooring was pricy.
Positives: The jobs were itemized with the contractor and I only paid each line on completion. This worked out r

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Me! Just kidding. I represented myself and the other agent was pretty terrible on a $4,000 home.

 Congratulations Kelsi!  I haven't heard of Hubzu.  I'll have to check it out!

Hi Matt,

It is an online auction site. I feel like it is better than auction.com. Auction.com seems to be able to up bid on the properties itself. I have put many bids in on auction.com and lose to see them come back on! 

I will say, the hubzu process took 2 months and was a little frustrating but I think this was more of a title and escrow issue. I would suggest getting your own title and escrow and not going with the ones hubzu provides.

All in all, I would use again! Let me know if you have any questions, I would love to help! Have you bought auction homes before?

Congratulations on this great deal!

@Kelsi Dockins

This is great girl, congratulations!! I live in Washington state and can’t find anything cheap here anymore. I’m gonna have to check out this website. If you don’t mind me asking, where in Washington is this property? I live in lacey.

@Kelsi Dockins . Sweet deal!! Congratulations. Is it in a rural area or in the suburbs? Did you use local contractors and where did you find them if the property isn’t close?

Woo!

@Tanya Rooney Thank you! It is in a suburb of St. Louis, MO. The neighborhood is not great from what I hear but i got lucky and all the neighbors own their homes and there are no vacant homes on the street! I used a local contractor from craigslist. I am glad the contractor is from the area, he said it was a dangerous neighborhood and if you are not from there might run into trouble. It worked out good though!

@Ehsan Rishat Thank you!

@Alicia Andry I live in Washington State and the house was in St. Louis, Mo. Sooo.... about 2000 miles. I was lucky to find a local contractor who really helped out. I still have not seen the home, so am a little worried about the quality but it is rented! 

I had quite a few challenges. One big one was the time difference! Contractors were calling at 5am and 6am asking questions! Home depot was amazing. I would order everything and get it sent to the contractors so they didn't even have to pick it up. 

Big challenges were cultural. Every time I paid any contractor whether it be electrician, roofer, framer, every time I paid someone they disappeared for a couple days and then came back and finished the work. This could have been because i didn't verify them but it was interesting that it was ALL the workers. 

Looking back, I should have flown out and looked at what work needed to be done but I trust my contractor and for the most part, things worked out!

@Joe Norman I live about 2000 miles away and have never seen it.

@Kelsi Dockins

This is an incredible achievement! I’m new to BP but this is the kind of deal I dream of. I live in LA and am priced out of this market. I don’t think I could ever have the confidence to buy a foreclosure property without first seeing it but maybe this a mental obstacle I need to overcome. It seems as if so many things could have gone wrong.

I’m so glad it worked out for you! With monthly expenses factored in, will this cash flow nicely right out of the gate?

This is the kind of deal that gives people in pricey markets hope! Congratulations Kelsi!

Congratulations Kelsi!! That is an amazing deal!

Originally posted by @Kelsi Dockins :

Hi Matt,

It is an online auction site. I feel like it is better than auction.com. Auction.com seems to be able to up bid on the properties itself. I have put many bids in on auction.com and lose to see them come back on! 

I will say, the hubzu process took 2 months and was a little frustrating but I think this was more of a title and escrow issue. I would suggest getting your own title and escrow and not going with the ones hubzu provides.

All in all, I would use again! Let me know if you have any questions, I would love to help! Have you bought auction homes before?

 Thanks Kelsi!  That's good to know.  I'm just starting out, so no auction homes yet.  In terms of risk, I assume you're not exactly sure about what all is wrong with the property you're getting?  (no opportunity to inspect or do contingencies right?)

@Kelsi Dockins that’s frickin awesome! Thanks for posting. You’re amazing!

@Kelsi Dockins you went all in buying a 4k house out of the gates! Especially a large, cheap home.  Good work lol. 

Hopefully vacancy doesn't become an issue. Way to jump right into the water.

It was really exciting at first, then really scary! I wouldn't do such a large one again. Am defintely worried about vacancy but got lucky that all the neighbors own their homes! Can you tell me a little about your Investments? Any pointers?

@Kelsi Dockins what neighborhood in St. Louis? When I saw the photo, I instantly thought it was St. Louis.

I presume you have property management in place?

Congrats! that is a great story, thanks for sharing! 

@Jim Chuong Thank you! :) 

@Alexander Lang Thanks! How's the market in Minnesota?

@Matt McConkey , It is in Kingsway East neighborhood. It is a little south of Ferguson. I do not have a property manager in place yet. Tax wise, if it was passive income I couldn't write everything off right away. I plan to get a property manager, current tenant is a contractor so we have an agreement on anything that comes up. I know this doesn't always work out, but so far so good!