Single-family residence buy & hold investment in New Castle.
Purchase price: $80,000
Cash invested: $45,000
My first investment. Purchased a single-family home that was foreclosed, cash, and invested my own capital into the rehab. Completely rebuilt the property, my thought behind it was learning everything I possibly could. I got hands-on with the demolition work, blacktop for the driveway and cement work for the sidewalks and porch. There were a lot of hurdles throughout the process, the good thing is that I didn't really have a timeline. I was willing to take some time to learn since the property didn't have any loans on it. I didn't realize that under the metal siding there were asbestos shingles so that was a big learning experience, I realized asbestos wasn't as scary as I thought as long as you follow rules and dispose of it properly. Our water line was broken, we replaced it and the local water company broke it when they came to turn the water back on. Getting them to replace it was a process in itself. The project had a lot of delays but I had fun learning the entire time. It was well worth it and I am currently working on a second property.
All electrical work got redone from the breaker box to the wiring, new drywall, new windows, kitchen, bathroom, doors, insulated the roof, new plumbing, new floors, new AC/Heating system, new hot water heater, sidewalks, driveway shed was completely rebuilt.
What made you interested in investing in this type of deal?
It was a small house and I thought it would be a quick project, turned out to be an 11-month process but I wanted to learn so it was well worth it.
How did you find this deal and how did you negotiate it?
I found this deal on Zillow, I used a real estate agent to help negotiate the deal. I wish I would have worked the price down a bit (which I know I could have) but at the time I was just excited to make it happen and close on the property.
How did you finance this deal?
Cash I had saved over the last 7 years.
How did you add value to the deal?
I did a complete rehab on the property.
What was the outcome?
I now own a beautiful rental property that I am proud of and managed to rent it within 2 days of listing it.
Lessons learned? Challenges?
Too many to type but I definitely learned that I need to have a timeline, extra cash and I need to be checking in on the contractors a few times a week.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, Norma Ocampo from Remax (West Grove, PA)
@Salvador Rodriguez what was the drug component of this rehab...was it the worst house on the block?
@Account Closed The people occupying the house before it was foreclosed were using drugs while they were there. We found syringes and other drug paraphernalia in the house when we were cleaning it out and doing demolition work. It was definitely the worst house on the block and the neighborhood.
Those "worst house" scenarios are the ones with the most upside. Good job!
@John Teachout Thanks!
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