Other other investment.
Purchase price: $325,000
Purchased 1970's 10,000 SF mansion with 18 acres, a 30x40 metal building, a 25x75 six-car garage and 1500 SF greenhouse for $325k. I divided the parcel into 3 pieces and sold the mansion and 4 acres for $350k. I invested $35k into dividing utilities and building fences. I spent $115k, turning the metal building into a house. I now have a 2/1 with 6 car garage on 4 acres and another 10 acres tract with roughly $300k in equity between the two leftover parcels.
What made you interested in investing in this type of deal?
The land and location. When I realized it was 18 acres with frontage on another road my only hope was to end up with that back 10 acres for a future high-end rental community.
How did you find this deal and how did you negotiate it?
Sat on MLS for over a year. I offered them all cash, no contingencies, close in two weeks and they took it with no negotiations.
How did you finance this deal?
Private equity partner
How did you add value to the deal?
The mansion we just power washed and took care of deferred maintenance. The place had set vacant for so long and was so big it was just intimidating to most. Most of the equity we put into the mansion we put in sweat equity.
We fenced up two sides separating the mansion from the metal building and shop. We then turned the metal building into a 2/1 house.
What was the outcome?
About as phenomenal as one could hope. We were pretty nervous to take on such a big project and our only goal starting was to end up with 10 acres for free. We not only got the 10 acres for free but ended up getting to live in the metal house on 4 acres for free. My appraisal is coming up and we expect to pull enough equity out to pay all the present bills to live for free the next two years and then will sell it for zero tax with not a dollar of our own original money in the deal.
Lessons learned? Challenges?
Don't be scared!!! I had a lot of people look at me like I was nuts to do this deal but my gut just would not let me walk away from it. My equity partner even tried to bail and I had to talk him into staying. Always follow your instinct! Really the only challenge was just the immense amount of labor. We worked our butts off for about 6 months straight but in the end, was worth every minute of it.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I am a real estate broker so yes, I would recommend myself! lol
Congratulations! I didn't one like that about 20 years ago and it was a winner.
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