Single-family residence buy & hold investment in Thayer.
Purchase price: $15,000
Cash invested: $32,000
I purchased this property in April 2019, sight un-seen, for $15,000 cash (I just made my first deal.... go me!) Unfortunately, this single family 3BR 1BA home built in 1880 was in desperate need of repair. After numerous hours of dealing with contractors, countless first time mistakes, and $17,000 of rehab costs later the house was finally finished and ready to rent. Fortunately for me there is no shortage of families looking for rentals in Southern MO, and I was able to find a good fit within days of finishing the project. The property now rents for $600/mo leaving me with a cash flow of approximately $350, and a cash on cash return of13.12%. Not bad on my first deal!
What made you interested in investing in this type of deal?
I became interested in purchasing, and rehabbing single family homes, after realising the benefits: easy to manage, limited risk, less capital needed (when compared to multi-family dwellings) and saw this as a quick way to start building my portfolio.
How did you find this deal and how did you negotiate it?
I had partnered with a local broker, a close personal friend of mine, that had the property listed for $18,000. I was able to negotiate the final purchase price to $15,000 cash.
How did you finance this deal?
$32,000 of my personal assets.
How did you add value to the deal?
Complete rehab, floor to ceiling. I was able to save on labor costs by doing a lot of work myself.
What was the outcome?
After a total $32,000 investment my ARV is now $70,000, and rents netting me a cash flow of $350/mo.
Lessons learned? Challenges?
1. Come into it with a plan
2. Write a budget for the project (I overspent in some areas of the rehab due to lack of proper budgeting)
3. Shop around for contractors. Not all contractor are created equal, some do better work than others.
4. Never tell a contractor what your budget is! Get several bids from different teams to determine what you can afford. Remember you get what you pay for...
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
United Country- Cozort Realty INC.
Congrats @Michael Lee Barton ! What's next? Where in southern mizzou?
Great Buy! Now at 6 months you can cash out refinance and not only recoup your investment but get additional cash back!
@Joseph Firmin Thank you! I intend to cash out refinance and put my initial investment back to work for me. The property is in Thayer, MO. Unfortunately, the area I operate in is very low income so I will have to brrrr several properties before I come out on top.
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