Single-family residence buy & hold investment.
Purchase price: $69,790
Cash invested: $31,800
I purchased a run down 3-2.1-2, 1980's 2 story directly from the HUD auction site online & I did nearly all of the rehab work myself! It has been an exceptional investment! It's only been vacant 1-2 months since completion & has only had 2 different long-term tenants. The current market value is around $180-$190k.
What made you interested in investing in this type of deal?
It was right after the housing market fell, I'd been a Realtor for a few years & I was selling a lot of HUD homes to clients so I knew how to navigate the auction. I'd always wanted to buy & "fix-up" houses ever since I remodeled my first house when I was in my late 20's but I never had any money. My Mom inherited some and my biggest cheerleader became my backer. I was terrified but I was off to the races.
How did you find this deal and how did you negotiate it?
Access to the MLS was super helpful during the housing crisis. I'd been keeping my eye out when this one came up for auction. I bid all cash and got lucky. I was so freaked when I got the property that I didn't go see it for a week. True story.
How did you finance this deal?
I paid cash and then after it was leased I refinanced it on a 20 year note, getting almost all my cash back out of it plus I'm paying down the principal by $417 a month! I guess you could say I accidentally did the BRRRR method without knowing it.
How did you add value to the deal?
True sweat equity; mine & sometimes my teens & hubby's too. Anything in need of repair or refreshing got addressed. I bondowed the dents in the front door, scraped popcorn ceilings, trimmed the trees, replaced the floors (with luxury vinyl plank long before it was the fad.) I added crown & a light rails to the entry level cabinets in the kitchen, I even used appliance paint to spray the yellow brass ceiling fans to a nice bedroom worthy white.
What was the outcome?
Luckily, my tenants love it & take care of the place.
Lessons learned? Challenges?
I spent way too much via holding costs trying to save money doing it all myself when in the long run, had I hired out some or most of it, I could have had it rented several months earlier. My biggest challenge is my reluctance to raise the rent..
Looks great! Congrats.
BRRRR without even knowing it. Congrats! Now onto the next one!?
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