Single-family residence buy & hold investment.
Purchase price: $115,000
Cash invested: $5,800
FHA Loan Live-in-Flip. I bought this house in order to advance my portfolio, allow for my previous permanent residence to transition into a full time STR, now a full time LTR. The FHA loan process was relatively painless, I had roommates that paid for half (with one roomie) to all (with two roomies) of the mortgage. Rehabbed the kitchen: tore out all upper cabinets, cleaned up some mold, repainted the walls/scraped the popcorn ceiling, put in faux shiplap (8in plywood strips), hung up open shelves, installed new light fixtures, painted inside and outside of under the counter cabinets (dark Blue), replaced drawers, added new stainless steel cabinet/drawer handles, tore down non-load bearing wall, replaced tiles, re-routed light switch, and painted window panes.
What made you interested in investing in this type of deal?
I was interested in getting my second property to get over the 2nd home barrier, learn more about the home buying experience, and decrease my living expenses.
How did you find this deal and how did you negotiate it?
Found this deal using my realtor in Bossier City, used the Rental Property calculator to make sure it was a manageable deal, and negotiated $5000 at closing.
How did you finance this deal?
Used the FHA loan and my own savings to purchase the house at 3.5% down (around $5500).
How did you add value to the deal?
Remodeled the kitchen and opened up the kitchen to the living room by removing a non-load bearing wall.
Lessons learned? Challenges?
You're going to have things break when you take on an older property. I had the hot water heater gas regulator go out on me ($100 item off Amazon), the Furnace died ($846), and there was a gas leak on the side yard (city's responsibility luckily). Have a back up fund for these types of scenarios - if I had to pay for the gas line repair (possibly $7000) I was prepared, but it would have put a big dent in my savings runway.
Also scraping popcorn is a pain in the butt.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Shane Cheatham is great! And the experts at Union Home Mortgage really did a great job at making the mortgage process easy for me!
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