Other buy & hold investment.
Purchase price: $45,000
Cash invested: $36,000
My late mom's first home that was paid-off but had liens on it. This is the investment that made me believe in the extreme power of real estate.
What made you interested in investing in this type of deal?
My mom had several properties as a result of the BRRRR process but all except this one had foreclosed. It was in distress and I needed to reverse the situation it was in.
How did you find this deal and how did you negotiate it?
I petitioned to become executor of this property after I heard the family wanted to let this home go due to the title being in limbo during probate. I found what was owed on the property, used a management company recommended by a realtor-friend, put up the cash to rehab and rent out, negotiated with the HOAs on paying back the delinquent fees through a payment program and hired an attorney to clean it's title.
How did you finance this deal?
The home was paid-off but it had many liens. The sheer rent the property generates paid for everything.
How did you add value to the deal?
I arranged to have the home rehabbed by cost-effective contractors recommended by an excellent property management company. I delayed the loss of the property by constantly communicating with the lien holders. I even arranged for property management to schedule HOA payments and taxes. The property itself is in a very valuable market, not much marketing had to be done to get it occupied.
What was the outcome?
Excellent cash flow from the rent. Great correspondence with my property management company. I foresee this property rented forever.
Lessons learned? Challenges?
I didn't address the HOA fees and state taxes in a prompt manner and let tenants squat too long. I wasn't even into real estate other than the fact that I didn't want to see my mom's hard earned work go to waste. I started to get organized and learn more about investing after I saw the cash-flow from this home. I first had problems with the management group during a lengthy eviction but after some serious correspondence, we hashed out the problems and performance has been stellar.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Debra Pagan - Century 21, she was the realtor that taught me much about investing in planned communities with HOAs. Pinnacle Management Group HI (PMGHI); full service, they handle evictions, marketing and property rehab.
Kudos for making the decision to take on all the headache to save the home. Very inspiring stories. I have been reading all these stories for the past week and will continue to as they help keep me focused on my goals. Thank you for sharing.
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