Single-family residence buy & hold investment.
Purchase price: $29,000
Cash invested: $25,000
3 bed 1.5 bath house in Bolles Harbor, walking distance to beach and marina.
What made you interested in investing in this type of deal?
I originally purchased as a home for myself to be closer to work. At the time the housing market wasn't great and due to a career shift it was difficult for me to get financing so I needed a house I could pay for with cash.
How did you find this deal and how did you negotiate it?
My cousin was a realtor, I worked with her a lot and we looked at close to 200 properties before settling on this one. The house was vacant for 7 years and needed a lot of work. It was being sold as a short sale and the bank was reluctant to accept the offer. At one point I almost walked away from the deal since their delay caused me to miss the deadline for the home buyers tax credit. The bank countered by dropping the price by the difference of the credit.
How did you finance this deal?
I used a cash loan from my 401k
How did you add value to the deal?
A lot of sweat equity. I replaced old plumbing and repaired damaged flooring.
What was the outcome?
Home is valued at more than 4X what I paid
Lessons learned? Challenges?
It was a lot of work. Some of the work, like demolition should have been sub'd out. I should have gotten more quotes on some of the work I hired out and I should have had a more solid plan going into the renovation.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Michelle is no longer working in real estate.
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