3011 Lockwood Rental

8 Replies

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $95,000
Cash invested: $120,000

SFR 3-2-2 in Carrollton with full rehab, rent and refi

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

Good neighborhood, good bones, good price, easy rehab. High rent area.

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

Wholesaler

How did you finance this deal?

Cash

How did you add value to the deal?

Full rehab - foundation repair, granite, new cabinets, new flooring throughout, etc.

What was the outcome?

Finished Rehab, Rented and Refi

Lessons learned? Challenges?

Not having a plan of attack before purchasing the property and in turn it took longer than originally planned to rehab, rent and refi.

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

Purchased the house from New Western Acquisition sales agent in Dallas. Georgetown Mortgage for conventional cash-out refi.

Hi Tam,

Impressive stuff there. Did you purchase the home entirely cash or did you use a HARD MONEY LENDER?

I Am in DAllas as well and looking to pull the trigger on a home. I have the option to use hard money lending as I don't have enough cash to buy a home out.

Hello Jonathan, this was my first purchase and I purchased that house cash. Rehabbed with cash and then did a cash out refi. 

However, since then all other transaction I have completed were with hard money loans. For me, I realized a couple things that has help me out after that first property. First, leverage is everything. Second, having a loan in place forced me to find a efficient ways to rehab the property to get it on the market faster. The longer you hold the property during the rehab, the more you are paying in interest.

@Jonathan Jimenez

Good news is Texas can be very competitive for financing so it’s worth shopping around. A deal like the one in this post (maybe less foundation work) would appear to be a good target to go after today. I have financed some in this area. Should be right down the fairway. Good luck!

Thank you for the kudos. What made me comfortable was that the wholesale agent that sold me the house had a bid in hand from a reputable company that they use. That made the decision to buy the house a little easier. Also, when I walked the house I did not see any signs of a foundation issues. So fortunately, the house had very minor issues and was relatively inexpensive to repair. Having an up front and honest agent selling you the house is always a plus.

@Tam Nguyen

Congrats on the deal! Would you mind sharing some more details? I'm interested in the numbers that the wholesaler used to advertise the deal:

- What was the wholesaler's advertised ARV? Was it reasonably in line with actual?

- What was the wholesaler's advertised repairs? Was it reasonably in line with actual?

- Did the wholesaler advertise estimated monthly rent that you would get? Are you actually getting the estimated rent?

- Were you able to pull all your cash investment out ($120,000) at refi?

Again congrats on the deal and thanks in advance.

Cheers... Immanuel

@Immanuel Sibero

Thank you, here are the answers to your questions.

The wholesaler advertised price was $95,000. Not really sure if it was in line with actual. At the time all similar Sq Footage properties in that area were being sold for approximately $155K and up. 

Wholesaler advertised repairs were estimated to be around $40K. It was reasonable given that there was a pool in the backyard that was not usable and was in need of major repair. However, I decide not to keep the pool because of the liability and insurance requirement for a rental. So I filled the pooled, which ended up cheaper than rehabbing the pool.

Wholesaler did not advertise monthly rent. I am getting 1.25% of total all in cost, or 1.57% of purchase price. I was able to pull $121K out on a (rate & term) cash out refi, which was 62% of the appraised value of $195K. I could've have taken more out of the refi, however decided not to because I wanted to keep more equity in the property.

Originally posted by @Tam Nguyen :

@Immanuel Sibero

Thank you, here are the answers to your questions.

The wholesaler advertised price was $95,000. Not really sure if it was in line with actual. At the time all similar Sq Footage properties in that area were being sold for approximately $155K and up. 

Wholesaler advertised repairs were estimated to be around $40K. It was reasonable given that there was a pool in the backyard that was not usable and was in need of major repair. However, I decide not to keep the pool because of the liability and insurance requirement for a rental. So I filled the pooled, which ended up cheaper than rehabbing the pool.

Wholesaler did not advertise monthly rent. I am getting 1.25% of total all in cost, or 1.57% of purchase price. I was able to pull $121K out on a (rate & term) cash out refi, which was 62% of the appraised value of $195K. I could've have taken more out of the refi, however decided not to because I wanted to keep more equity in the property.


Thank you for the detail. Wow those are great numbers for Carrollton area. Didn't think those numbers exist where you can refi all your money out and then some. Again congrats!

Cheers... Immanuel

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you